Business sentiment keeps slidingKorean manufacturers’ business confidence fell for the fourth quarter, the government said yesterday, reflecting concerns over a global economic downturn that is already hurting the country’s exports.
The manufacturers’ business survey index (BSI) for the October-December period came to 95, compared with 101 for the third quarter ended Sept. 30, according to the Ministry of Knowledge Economy.
A reading above 100 means a majority believes conditions for business will improve from the previous month with a reading below the baseline meaning pessimists outnumber optimists. The quarterly survey was conducted from Sept. 3 to 21, and 508 manufacturing companies responded.
The ministry said the poor business sentiment for the fourth quarter represented difficulties created by external uncertainties.
“The continuing external uncertainties and global economic jitters are also working as heavy loads on the country’s economy,” it said in a press release.
“It is increasingly proving to be difficult to create an opportunity for the country’s exports and domestic sales to rebound due to a delay of the global economic recovery.”
In the first nine months of the year, the country’s exports dropped 1.5 percent from the same period last year to $408.4 billion, the ministry said earlier.
The BSI for exports in the fourth quarter posted the lowest reading of 92 among four survey categories that reflect outlooks in various economic aspects, including overall sales and local deliveries, which had respective BSI readings of 98 and 95.
By industrial sector, semiconductor manufacturers expressed the most positive sentiment with a BSI reading of 105, followed by electronics manufacturers with a BSI reading of 102.
The shipbuilding industry, hit the hardest by the financial woes in Europe where most of the world’s ship orders originate from, registered a low reading of 86.
The ministry added that the actual BSI, which compares businesses’ performances from quarter to quarter, was tallied at 84 for Q3 with sales at home coming to 85 and those abroad 86.
Korea should continue its efforts to boost domestic demand and generate more jobs in order to prop up employment and help support overall economic growth, the country’s top economic policy maker said yesterday.
The remarks by Finance Minister Bahk Jae-wan came after government data showed the jobless rate for September was 2.9 percent, down from the previous month’s 3 percent.
The number of jobs added to payrolls also increased to 685,000, the fastest growth in more than 10 years. The improvement is due in part to the base effect from last year, when job growth slumped.
“The job market seems to be putting up a good defense [amid tough economic situations] even in consideration of the base effect,” Bahk said at a crisis management meeting.
“Employment among those in their 20s remains weak and job creation is expected to slow after October due to the employment figures’ tendency to follow economic conditions,” he said. “We need to continue our efforts to boost domestic demand and generate more jobs.”
In particular, he singled out the content industry, suggesting such service sectors will boost hiring, domestic demand and eventually drive the country’s future economic growth.