Uncertainty following the U.S. presidential election and concerns about a slowdown in exports have resulted in a significant decline in the manufacturing business sentiment this month, marking the lowest level in 13 months.
According to the “Business Survey Index” released by the Bank of Korea today (27th), the manufacturing Business Sentiment Index (BSI) for this month dropped by 2.0 points (p) to 90.6 from the previous month. This is the lowest level since October of last year (90.5).
Factors such as inventory levels (-1.1p) and financial conditions (-0.8p) contributed to the downturn.
Hwang Hee-jin, head of statistics at the Bank of Korea, stated, “The semiconductor sector is experiencing differentiation within its sub-industries, and there is increasing concern over a decline in exports for mobile phone component manufacturers. The automobile industry is also facing deteriorating sentiment due to strikes at parts suppliers, production decreases, and intensified competition.”
He added, “While it is difficult to say that the impact of Trump’s election victory has been fully reflected, some post-election uncertainties and fears of an export slowdown appear to be partly considered. Companies anticipated potential negative impacts from Trump’s trade policies on industries like automobiles, green energy, and semiconductors.”
The non-manufacturing BSI rose by 0.4p to 92.1, driven by profitability (+1.0p) and sales (+0.3p) improvements.
The overall industry BSI, which combines manufacturing and non-manufacturing, recorded a 0.6p decrease to 91.5.
The BSI is a psychological indicator calculated based on major indices (five for manufacturing and four for non-manufacturing) among business surveys. A score above the long-term average (100) from January 2003 to December 2023 indicates optimistic business sentiment, while below implies pessimism.
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