South Korean manufacturers’ business outlook for August improved as trade and business activities slowly normalized.
The business survey index (BSI) of manufacturers came to 57 for August, up 6 points from the previous month, the Bank of Korea said Thursday.
The index for July also rose by 6 points, extending gains for the second month after dipping to 49 in May, the lowest since the global financial crisis of 2008-2009.
The August index was the biggest improvement since March 2019 when it rose by 11 points.
Still, overall business sentiment was far from positive. A reading of below 100 means more companies are pessimistic than optimistic about business conditions in the next month.
The easing was largely due to recovery in auto parts and electric parts sales coupled with improved profit margin for petrochemical makers, according to the BOK.
The BSI for the automotive sector jumped 15 points on improved auto part sales. The index for chemical materials and products also rose 8 points, and electronic and communication equipment 6 points.
Manufacturers cited economic uncertainty as the biggest threat to their business, followed by the sluggish domestic economy and export slump.
The BSI for non-manufacturers rose 2 points for July and 1 point for August.
The economic sentiment indicator (ESI), which combines the BSI and the consumer sentiment index, rose 6.4 points to 69.5. The reading had plunged to 55.7 in April, the lowest since 55.5 in December 2008.
The cyclical ESI, which removes seasonal fluctuations and other irregular components, fell 2.6 points to hit an all-time low of 60.3.
By Kim Hyo-jin
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