Manufacturers see grim days ahead as BSI sinks

Optimism among Korean manufacturers for the fourth quarter hit its lowest level in over three years due to persistently weak domestic demand, a poll showed yesterday.

In its survey of 2,500 local manufacturers, the Korean Chamber of Commerce & Industry said the business sentiment index (BSI) plunged to 74 for the October-December period, down from 88 for the current quarter.

The BSI for the coming quarter marks the lowest level since the second quarter of 2009, when it plummeted to 66 due to the 2008 global financial crisis. The index has remained below 100 since the fourth quarter of 2011.

A reading below 100 means pessimists outnumber optimists.

Of the respondents, 68.5 percent said that shrinking consumer sentiment is the biggest hurdle to their businesses, while 15.1 percent cited a possible change in business-related policies in the wake of the presidential election in December as another reason for the bearish outlook.

The consumer sentiment index - a gauge of consumers’ overall economic outlook based on living conditions and future spending - came in at 99 for this month, unchanged from the previous month, according to a survey by the Bank of Korea.

Sales at both local discount outlets and department stores, including Lotte Department Store, dropped from a year ago for a third month in August, showing a possible contraction in consumer spending, according to the Ministry of Knowledge Economy.

Big companies’ BSI stood at 69, while that of smaller companies came to 75.

Yonhap