The all-industry Composite Business Sentiment Index (CBSI) stood at 104.2, the highest since August 2022, according to the Bank of Korea (BOK).
Manufacturing CBSI rose to 105.6, its highest since June 2022, while the nonmanufacturing index reached 103.2, the strongest since September 2022.
The headline improvement contrasted with manufacturers' assessment of overall business conditions. The manufacturing business-conditions BSI slipped 1 point to 78 in October, while its November outlook fell 3 points to 78.
CBSI combines five indicators for manufacturers, including production, new orders, inventories, financial conditions and overall business conditions. A reading above 100 means composite sentiment is stronger than its 2003 - 2025 long-term average.
October was also the first survey based on a revised sample reflecting 2024 corporate tax filings. The BOK cautioned that comparisons with September and earlier readings may partly reflect the regular three-year sample overhaul.
The rise in manufacturing CBSI was driven largely by stronger production and orders after temporary disruptions from the Chuseok holiday last month and automaker strikes faded.
Manufacturing production BSI rose 5 points to 94 and new orders gained 4 points to 91.
The improvement was particularly pronounced in the auto sector, where the production index jumped 30 points and new orders rose 20 points. Passenger-car exports increased 40.9 percent from a year earlier during the first 20 days of October after falling 5.6 percent in September.
The recovery spread into supplier industries.
The inventory index for machinery and equipment fell 12 points as deliveries to semiconductor, shipbuilding and auto companies increased. A lower inventory reading contributes positively to CBSI.
Chemical producers saw both production and new-orders indexes rise 19 points on stronger demand from battery and energy-storage system makers.
Stronger activity, however, did not remove broader concerns among manufacturers.
Weak domestic demand remained their most commonly cited business difficulty, accounting for 21.6 percent of responses, followed by higher raw material prices at 19.9 percent and economic uncertainty at 13.7 percent.
Labor shortages and higher labor costs accounted for 8.0 percent, up 2.7 percentage points from September, while the share citing funding shortages rose 1.0 percentage point to 8.0 percent.
Nonmanufacturing sentiment also improved as semiconductor-related investment spread into construction and other service industries.
The business-conditions index for construction rose 12 points and its financial-conditions index gained 11 points, helped by orders for semiconductor plants, data centers and residential projects in the Seoul metropolitan area.
Wholesale and retail profitability rose 9 points on stronger auto exports, transactions involving semiconductor-factory equipment, foreign tourist arrivals and seasonal medicine demand.
Transportation and storage firms saw their business-conditions index rise 11 points and profitability gain 6 points as freight volumes and ocean shipping rates increased.
The nonmanufacturing business-conditions BSI rose 2 points to 77, with its November outlook increasing 3 points to 78.
The gap between composite sentiment and firms' overall assessment also remained visible in the outlook for November.
The all-industry CBSI outlook stood at 101.8, with manufacturing at 103.0 and nonmanufacturing at 101.0, all above the composite index's long-term benchmark.
Manufacturers' overall business-conditions outlook, by contrast, fell to 78.
The Economic Sentiment Index (ESI), which combines selected business and consumer survey indicators, rose 0.9 point to 100.8, its highest since June 2022.
Its cyclical component, which removes seasonal and irregular fluctuations, increased 1.0 point to 100.1.
The ESI improvement was concentrated on the business side. Manufacturing financial-condition expectations and the nonmanufacturing business outlook each contributed 0.6 point to the index.
Export expectations, household income expectations and consumer spending expectations each subtracted 0.3 point.
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