The business sentiment in South Korea has declined for the first time in three months due to reduced working days, strikes, and the impact of the Middle East conflict. In contrast, the non-manufacturing sector continued to show improvement, buoyed by seasonal demand and increased outdoor activities.
According to the Bank of Korea's 'September Business Survey Results' released on September 29, the composite business sentiment index (CBSI) for all industries fell to 99.1, a decrease of 0.5 points from the previous month, marking the first decline in three months.
The CBSI is a measure of business sentiment derived from key indices in the business survey index (BSI), which includes five manufacturing and four non-manufacturing indicators. A score above 100 indicates optimistic sentiment, while a score below 100 reflects pessimism.
By sector, the manufacturing CBSI dropped to 99.5, down 4.3 points from the previous month, while the non-manufacturing CBSI increased. The decline in manufacturing was driven by decreases in inventory (-1.8 points), new orders (-1.0 points), and production (-0.6 points). Conversely, the non-manufacturing sector saw increases in financial conditions (+1.0 points) and business conditions (+0.7 points).
Bank of Korea official Bae Jun-sung explained, "The decline was due to reduced working days, strikes, and the impact of the Middle East conflict, while the non-manufacturing sector continued to rise due to seasonal demand and increased outdoor activities."
The sentiment varied by company size. The CBSI for large enterprises stood at 101.2, down 2.5 points, while the index for small and medium-sized enterprises fell to 94.4, a decrease of 5.4 points.
Looking ahead, businesses are optimistic about next month. The forecast for the October CBSI for all industries is 99.6, unchanged from the previous month's forecast. The manufacturing outlook is 101.1, down 1.4 points from the previous month, while the non-manufacturing outlook rose by 1.0 point to 98.6.
* This article has been translated by AI.
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