BSI for July is not much better than June’s 71

Korean companies have a downbeat business outlook for July as the country struggles with stagnant domestic consumption and an uncertain global economy.

The business survey index (BSI) of manufacturing companies came in at 72 for next month, down from 74 for June, according to the Bank of Korea on Wednesday.

Despite the June projection of 74, the final BSI index for manufacturers for the month fell to 71, according to the Bank of Korea.

The indicator has been stuck at 71 for three consecutive months.

A BSI reading above 100 means there are more companies that are optimistic about the economy, while a reading below signifies there are more pessimists than optimists.

As for the reasons for pessimism, shrinking domestic demand was cited by most, accounting for 26.2 percent. That was followed by uncertain economic conditions at 18.9 percent. The third-most cited factor was weak exports, with tough competition coming in fourth.

The index for domestic sales stood at 83 in June, down from the previous month’s 86. For the July prediction, the figure recorded 81.

A separate index about the companies’ sentiment toward exports stood at 86 for July, recovering from a three-point month-to-month decrease in the previous month.

Korea’s exports have been declining for 17 consecutive months, the longest streak ever.

The BSI for the non-manufacturing sector was the same as for manufacturers at 71 in June while the projected BSI for July came to 72.

At the start of the year, the indicator gradually improved until April but then started to decline.

The central bank surveyed 2,842 companies across the nation from June 15 to 22. Of them, 1,734 were manufacturing firms, while the remaining companies were in other industrial sectors.

Consumer confidence also remained below 100 for this month.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]