Manufacturers’ optimism up for Q2

Korean manufacturers’ confidence in conditions for the second quarter improved, reflecting expectations that a U.S. economic recovery will buoy global growth in the coming months, a government report showed yesterday.

The manufacturers’ business survey index (BSI) for the April-June period came to 104, up from the 89 predicted for the current quarter, according to the report by the Ministry of Knowledge Economy.

A reading above 100 means optimists outnumber pessimists with a reading below the baseline meaning the opposite. The online survey polled 508 manufacturers across the country.

“Overall business sentiment has gotten a boost from signs that the world’s largest economy is making a comeback and the implementation of Korea’s free trade pact with Washington,” the ministry said.

The U.S. unemployment rate, a key barometer of economic health, stood at 8.3 percent last month from 8.7 percent in November. The bilateral free trade agreement that went into effect on March 15 is forecast to push up Korea’s exports by an average of $1.29 billion every year for the next 15 years.

According to the report, the BSI numbers for domestic sales, exports and profits all moved up for the coming quarter, with most industrial sectors exceeding the break-even 100 mark for the second quarter.

The readings for semiconductors and autos each reached 133 and 108, respectively, with steel hitting 112.

The ministry in charge of the country’s industrial policy and trade promotion, however, said that local manufacturers face downside risks such as lingering euro zone woes, high energy prices and a slowdown in growth projected for China this year. Yonhap