Index shows business sentiment down

Korea’s manufacturing confidence for the first quarter of next year plunged to a three-year low on jitters over a global economic slowdown, a poll showed yesterday.

According to the survey of 2,200 local manufacturers by the Korea Chamber of Commerce and Industry, the business sentiment index slumped to 77 for the January-March period of 2012, down 17 points from 94 for the current quarter, and staying below the 100-point level for the second straight quarter.

The figure marks the lowest level in nearly three years since it hit 66 in the second quarter of 2009 in the aftermath of the global financial crisis. A reading below 100 means pessimists outnumber optimists.

“Local companies are concerned about grim economic conditions for next year,” said the KCCI in a statement.

The companies said sluggish demand, financial troubles, fluctuations in exchange rates and high commodity prices will hurt their business conditions in the coming quarter.

The survey also said that both conglomerates and smaller companies have a gloomy picture of their business conditions in the first three months of next year.

The first-quarter sentiment index for large companies stood at 79, down from 94 for the fourth quarter of this year, and that for small- and medium -sized enterprises dropped from 94 to 77.

The confidence index for exporting companies also fell to 84 from 99, while the figure for domestic-oriented firms fell to 75 from 93, according to the survey.

Yonhap