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South Korea's Business Sentiment Turns Positive for First Time in 4 Years

South Korea's business sentiment index has risen above the benchmark of 100 for March, marking the first optimistic outlook in four years. The sharp rebound is primarily attributed to strong exports in semiconductors and automobiles. The manufacturing sector's outlook saw a significant jump, though the non-manufacturing sector remains pessimistic. Concurrently, producer prices have risen for a fifth consecutive month, indicating persistent inflationary pressures.

Key Points: S. Korea Biz Sentiment Positive on Strong Exports

  • First positive BSI in 4 years
  • Driven by chip and auto exports
  • Manufacturing sector outlook surges
  • Producer prices rise for 5th month
2 min read

Biz sentiment for March turns positive on strong exports in S. Korea

South Korea's business outlook turns optimistic for March, ending a 47-month slump, driven by robust semiconductor and auto exports.

"It is significant that business sentiment... has improved - Lee Sang-ho"

Seoul, Feb 24

South Korea's business sentiment turned positive for March, marking the first rebound in four years, due to the country's robust exports of chips and automobiles, a poll showed on Tuesday.

The business survey index (BSI) of the country's top 600 companies by sales stood at 102.7 for next month, according to the monthly poll by the Federation of Korean Industries (FKI), reports Yonhap news agency.

A reading below 100 means pessimists outnumber optimists, while a figure above the benchmark indicates the opposite. The index had remained below the benchmark for 47 consecutive months through February.

The BSI outlook for the manufacturing sector came to 105.9 for March, rising sharply from 88.1 in February and reaching its highest point since the 108.6 reading in May 2021.

Within manufacturing, the machinery industry reported a reading of 128.6, with the electronics and telecommunication equipment sector posting 113.3.

The BSI outlook for the non-manufacturing sector, however, came to 99.4, remaining pessimistic.

"It is significant that business sentiment, which had been sluggish due to the lingering economic slump, has improved," Lee Sang-ho, head of the federation's economic and industrial division, said in the report.

"The National Assembly and the government need to make efforts to keep up with the momentum to revitalise businesses through regulatory reform so that the improvement does not remain a short-term rebound," Lee added.

Meanwhile, South Korea's producer prices rose for a fifth consecutive month in January, driven by a marked increase in semiconductor prices and higher agricultural costs, central bank data showed on Tuesday.

The producer price index (PPI), a key gauge of future consumer inflation, climbed 0.6 percent from a month earlier to 122.50 in January, accelerating from a 0.4 per cent rise in December, according to the preliminary data from the Bank of Korea (BOK).

The index has increased steadily since September, rising 0.4 per cent that month and 0.3 per cent both in October and November.

From a year earlier, producer prices went up 1.9 per cent in January.

Producer prices serve as a key indicator of future inflation trends, as they affect the prices businesses charge consumers in the months ahead.

- IANS

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Reader Comments

P
Priya S
Interesting to see the split between manufacturing and non-manufacturing. The service sector is still struggling there, just like in many parts of the world. Hope the positive sentiment translates to more jobs and stability. We need our own regulatory reforms to help Indian businesses thrive long-term.
V
Vikram M
Chips and automobiles driving the growth... sounds familiar? It's a lesson for India. We have the talent and the market. We need to create an ecosystem that supports our semiconductor and auto manufacturing ambitions without getting bogged down in bureaucracy. Jai Hind!
S
Sarah B
The consecutive rise in producer prices is a bit concerning though. It usually means higher consumer prices are coming. While business sentiment is up, the average person might feel the pinch soon. A balanced approach is needed.
R
Rohit P
First positive reading in 47 months! That's a very long slump. Shows how resilient economies can be. Hope this positivity spreads across Asia. Our IT and pharma exports have been strong, but manufacturing needs a similar boost. Let's learn from their turnaround.
K
Kavya N
With all due respect to the positive news, the article mentions the need for regulatory reform to make it last. That's the key takeaway for us in India. We often celebrate short-term gains without fixing the underlying structural issues. Sustainable growth requires hard policy decisions.

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