Economic indicators fall in tandem

Cars ready for overseas shipment wait on the dock at Mokpo port, South Korea.

According to results of a survey on corporate conditions in May released by Bank of Korea June 1, the Business Survey Index (BSI) of manufacturers nationwide fell to 83 from previous month’s 87. A reading below 100 means, as far as business outlook is concerned, pessimists outnumber optimists.

The BSI of smaller firms dropped by six points, while that of large companies fell three points, and the index declined for both exporters and companies with a domestic customer base.

The Bank of Korea polled 2,929 manufacturers and non-manufacturers on their outlook of the economic situation. Manufacturers mentioned the low exchange rate and high prices of raw materials as the main factors behind bad performance in April, and said that the situation worsened in May. The BSI [FOR WHAT?????] came down for two consecutive months and it was 86 for June, 8 points lower from a month earlier.

The BSI provided by the Federation of Korean Industries (FKI) also shows pessimistic outlook on the future business conditions, with its index coming down to 98.6. This is the first time in 10 months that the FKI’s BSI fell below 100 mark. By industry, non-manufacturers’ forecast for June shows a similar level to the previous month, while some manufacturers such as paper and steel had a seriously pessimistic outlook.

In the meantime, the Korea Chamber of Commerce and Industry (KCCI) said that the BSI based on a survey of 1,485 manufacturers nationwide fell to 94 in the third quarter, from the previous 116. The KCCI’s index fell below 100 for the first time since the first quarter of last year. While large companies forecast that the business conditions in the third quarter will be similar to the second quarter, smaller firms predicted the situations will get even worse.