South Korea’s business sentiment gained its biggest boost in more than a decade this month upon signs of recovery of domestic and global economy amid waning of the coronavirius scare.
According to the Bank of Korea on Thursday, business survey index (BSI) of overall industry for October stood at 74, up 10 points from the previous month. This was the biggest monthly jump in BSI since April 2009 when it added 11 points.
The data is in line with consumer confidence index that also gained by the fastest in nearly 12 years in October.
For the next month, the BSI of the overall industries rose 7 points to 72. The index of manufacturers grew 8 points to 76 and non-manufacturing sector 7 points to 69.
The BSI shows how companies predict the current business conditions and future outlook, with a reading below 100 meaning more firms are pessimistic and vice versa for above 100. The latest poll was conducted on 2,823 companies between Oct. 14 and 21.
Business confidence rebounded this month from its first dip in five months in September due to concerns over a resurgence of Covid-19 infections.
It recovered to the pre-coronavirus level of 75 in January, but nevertheless still far off the neutrality level of 100.
The BSI for the manufacturing sector added 11 points from last month to 79, as sentiment of companies big and small in all types improved. In particular, small- and mid-sized manufacturers showed the fastest-ever improvement by 18 points since related data became available in January 2003.
Confidence in the auto sector gained 35 points, chemical materials and products makers 11 points and electronics and communication device providers 6 points.
The BSI for non-manufacturing industry rose 7 points to 69, with that for wholesale and retail companies increasing 10 points, information and telecommunication firms 10 points and construction business 5 points. The growth was also the biggest since December 2009.
The economic sentiment indicator (ESI), which combines the BSI and the consumer sentiment index, was up 12.7 points to 85.9 in October.
The cyclical ESI, which removes seasonal factors and other variables, increased 2.7 points to 78.
By Choi Mira
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