Business sentiment has improved, buoyed by a favorable semiconductor market. However, while manufacturing sentiment has risen for the fourth consecutive month, non-manufacturing sentiment has slowed.
According to the Bank of Korea's business survey released on July 30, the Composite Business Sentiment Index (CBSI) for all industries rose by 0.8 points from the previous month to 98.5, thanks to improvements in the manufacturing sector.
The CBSI is a psychological indicator calculated based on key indices from the Business Survey Index (BSI), which includes five manufacturing and four non-manufacturing sectors. A score above the historical average of 100 (from January 2003 to December 2025) indicates optimistic sentiment, while a score below suggests pessimism.
By sector, the manufacturing CBSI increased by 2.0 points to 103.2, driven by new orders and favorable business conditions, while the non-manufacturing CBSI fell by 0.2 points to 95.2. The manufacturing CBSI is at its highest level since June 2022 (107.1). The rise in manufacturing was supported by increases in new orders (0.8 points) and business conditions (0.7 points), while the decline in non-manufacturing was led by a drop in financial conditions (-0.5 points).
The manufacturing sentiment index has shown consistent growth since March (97.1), with readings of 99.1 in April, 100.8 in May, and 101.2 in June, reflecting the positive impact of the semiconductor market.
By company size, the CBSI for large enterprises rose by 0.8 points to 105.3, while the CBSI for small and medium-sized enterprises increased by 1.9 points to 97.6.
Lee Heung-hoo, head of the Bank of Korea's Economic Sentiment Survey Team, stated, "Overall, we can interpret that small and medium-sized enterprises related to the semiconductor and defense industries have benefited from the favorable conditions in these sectors."
For August, the CBSI for all industries is projected to be 100.5 for manufacturing, a 2.3-point increase, and 93.7 for non-manufacturing, a 0.5-point rise.
Looking at specific sectors, the BSI for manufacturing showed gains in areas such as other machinery and equipment, medical and precision instruments, and metal processing. In contrast, non-manufacturing performance declined in transportation and warehousing, professional and scientific services, and retail.
The Economic Sentiment Index (ESI) for July, which incorporates the Consumer Sentiment Index (CSI), rose by 1.1 points to 97.9, driven by forecasts for manufacturing financial conditions and household income. The seasonally adjusted ESI cyclical fluctuation value increased by 0.2 points compared to the previous month, reaching 95.9.
Lee noted, "While the ESI is still below the long-term average, we can assess that the sentiment of businesses and consumers is gradually recovering."
* This article has been translated by AI.
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