BSI drops in concert with lower growth forecasts

Korean manufacturers’ business confidence for June moved down due to an overall slowdown in economic conditions, the central bank said yesterday.

The business survey index (BSI) for the manufacturing sector fell to 86, from 90 points tallied for May, according to the Bank of Korea (BOK). The downturn follows the index rising for four straight months from February through May.

The index measures manufacturers’ outlook on business conditions for the coming month. A reading below 100 means pessimists outnumber optimists. The nationwide survey of 2,774 companies was conducted from May 15-22.

“The fall in the BSI reflects rising across the board concerns in the business community,” the BOK said.

The central bank downgraded the growth forecast for Asia’s fourth-largest economy from 3.7 percent to 3.5 percent in April, mainly because of persistent European Union fiscal woes and worries that the global economy will grow at a slower pace than previously anticipated. Korea’s economy grew 3.6 percent in 2011.

Business confidence among large companies stood at 96, down 2 points from the previous month, with numbers dropping 5 points for small and medium enterprises to 81.

Yonhap