The Impact of the December 3rd Insurrection Worsens: “Both Exports and Domestic Consumption to Deteriorate in January Next Year”

Frozen Business Sentiment: January BSI(84.6) Drops Sharply by 12.7 Points
Largest Decline in 4 Years 9 Months Since COVID-19
Prolonged Weakness Lasting 2 Years 10 Months… The Longest in History,
, ‘Following this month, the economic outlook for domestic companies in January next year also appears bleak, resulting in a negative record for the longest period of pessimistic economic outlook for major domestic companies.’,
,
, ‘On the 26th, according to a Business Survey Index (BSI) survey conducted by the Federation of Korean Industries targeting the top 600 companies by sales, the BSI outlook for January 2025 was recorded at 84.6.’,
,
, ‘A BSI above 100 means there are more positive economic outlooks compared to the previous month, while below 100 means more negative outlooks. A figure below 100 has been consistent since April 2022 (99.1), remaining below the benchmark of 100 for 2 years 10 months, marking the longest continuous period of decline since the survey started in January 1975.’,
,
, ‘In terms of industries, the outlook for both manufacturing and non-manufacturing sectors was gloomy for January next year. The BSI for manufacturing was 84.2, and for non-manufacturing, it was 84.9.’,
,
, ‘The manufacturing BSI recorded 100.5 in March last year but has fallen below the benchmark since April (98.4) for ten consecutive months. Among ten sub-sectors in manufacturing, only electronics and telecommunications equipment (105.3) are expected to perform well, exceeding 100.’,
,
, ‘In non-manufacturing, only transportation and warehousing (103.8) among seven sub-sectors showed a positive outlook.’,
,
, ‘In specific areas, the outlooks were negative across all seven items: domestic consumption 88.6, investment 89.4, employment 90.0, exports 90.2, financial conditions 92.1, profitability 94.0, inventory 104.9. An inventory figure above the benchmark of 100 implies a negative outlook due to excess inventory.’,
,
, ‘Domestic consumption reached its lowest in 52 months since September 2020 (88.0), and exports their lowest in 51 months since October 2020 (90.2), both showing record negative outlooks. Investment was at its lowest since April last year (88.6), 21 months ago.’,
, ‘Sang-ho Lee, head of the Economic and Industry Division of the FKI, stated, “The external business environment changes, such as the new Trump administration in the U.S., combined with heightened domestic political uncertainties, are raising concerns over exchange rate volatility and prolonged domestic demand sluggishness,” and urged that “efforts should be made for exchange rate stabilization and revitalization of industry, avoiding legislative discussions that could increase management uncertainties, such as amendments to the Commercial Act for expanding directors’ duties of loyalty.”