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Most Korean manufacturers expect conditions to worsen in Q3

Published: 30 Jun. 2024, 18:29

This photo taken April 1, 2024, shows container ships at a port in Busan. [YONHAP]

Most Korean manufacturers expect their business conditions to worsen in the third quarter due mainly to high costs and high interest rates, a poll showed Sunday.

A survey of 2,238 manufacturing firms nationwide put the business sentiment index (BSI) at 89 for the July-September period, down 10 points from the current quarter, the Korea Chamber of Commerce and Industry (KCCI) said in a statement.

A reading below 100 means companies expecting deteriorating business conditions outnumber those that anticipate an improving situation.

"High interest rates and rising raw material costs weighed on local manufacturing companies despite improved exports led by higher overseas chip demand," the statement said.

The BSI for chip exporters stood at 112 for the coming quarter, up 8 points from three months earlier, while that for pharmaceutical firms plunged 27 points to 78 during the same period, the statement said.

The figure for cosmetics firms came to 100, with that for automakers and shipbuilders reaching 91 and 97, respectively.

Most other sectors recorded a reading below 100, with the index amounting to 79 for steelmakers and 85 for refiners and petrochemical firms.

The findings also showed that 60.9 percent of the respondents predicted they would not be able to achieve their operating profit targets in the first half of this year.

They said sluggish domestic demand, as well as high oil and raw material prices, will be major concerns for their businesses in the second half, the statement said.

Yonhap