Companies have dim view of Q4

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Companies have dim view of Q4

The past nine months have been gloomy for most Korean companies, and they are not upbeat about the next three months, a survey by a business lobby group showed on Monday.

There was only one exception when business performance is measured by region: companies in Jeju Island, a scenic tourist area favored by Chinese tourists, were optimistic.

The Korea Chamber of Commerce & Industry polled 2,300 manufacturers in Korea about prospects for the fourth quarter.

The gauge of how optimistic or pessimistic they are is the business survey index, or BSI. Figures of 100 or over mean respondents were more optimistic.

The average projection was 87 for the last quarter of this year, down from 97 in the second quarter and 88 in the third.

“The momentum of the BSI’s slide has slowed down, but the dominant view among companies polled is that business will worsen,” said Lee Jong-myung, head of the economic policy team at the KCCI. “External factors such as the Chinese economy’s light landing and the lingering potential of the U.S. central bank raising the benchmark interest rate are putting a strain on them.”

By region, the BSI at companies located in the Seoul metropolitan area registered 90, followed by 89 in South Chungcheong, 88 in South Jeolla and 83 in Gangwon.

Jeju saw the figure spike by 42 from the previous quarter to post 132, on the rosy outlook that the Chinese tourists who refrained from visiting Korea in the wake of the outbreak of the Middle East respiratory syndrome (MERS) in the May-June period will return.

July experienced a huge decrease in the number of tourists traveling to Jeju. The scenic island also had a bright outlook for improved real estate transactions and construction orders, as many urban dwellers and Chinese are located in the region.

On average, the island enjoyed an inflow of 300,000 tourists a month. That figure dropped to 80,000 in July. But since September, 210,000 tourists have visited Jeju.

Export-reliant companies and small-sized firms were more upbeat, with the BSI standing at 88 and 89, respectively.

But large companies, including conglomerates, registered a mere 76.

“Companies in the steel, non-steel metal and machinery industries were particularly pessimistic about their business performance [in the last quarter],” said Lee of the KCCI.

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