South Korea’s business sentiment in September slightly improved from the previous month due to the Chuseok holiday and the launch of Samsung Electronics’ flagship smartphone Galaxy Note 10, although overwhelmingly gloomy over future prospects.
According to data released by the Bank of Korea (BOK) on Tuesday, the business survey index (BSI) of the overall industry rose 3 points from a month ago to 72 in September. The figure is still way below 100, meaning there are more businesses are negative than positive about the economy.
The BSI for the manufacturing sector added 3 points to 71. The business confidence of electronics and telecommunication devices makers jumped 11 points to 83 on high expectations for the premium smartphone Galaxy Note 10.
The grocery industry index surged 9 points to 80 on expectations of growing demand during the Chuseok holiday. The index for the auto industry, on the other hand, plunged 11 points to 65 due to the reduced working days.
By size, the BSI of large companies edged up 1 point to 79 and that of small- and mid-sized firms climbed 5 points to 64. By business type, the index for export-oriented companies gained 1 point to 81 and that for domestic demand-led firms added 4 points to 66.
The business sentiment for the overall non-manufacturing sector increased 2 points to 72. The reading for wholesale and retail sector jumped 8 points to 72 due to the Chuseok holiday. The index for the real estate industry soared 12 points to 71 thanks to the recent gains in housing supply, offsetting the 10-point decline in August when the government had announced a new policy to put a cap on prices of apartment houses under construction.
For the next month, the index rose 2 points to 74, indicating minor expectation for business improvement. The economic sentiment indicator (ESI), which combines the BSI and the consumer sentiment index (CSI), gained 2.9 points to 91.3. The cyclical ESI, which removes seasonal factors and other irregular fluctuations, was down 0.3 point to 90.3.
By Lee Yu-sup and Choi Mira
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