Mid-sized corporations' business outlook improved for the fourth straight quarter. Manufacturing led the overall uptrend as expectations for an export rebound grew, centered on artificial intelligence (AI) servers and high-performance semiconductors. Still, the business outlook index remained below the baseline of 100.
According to the "2026 third-quarter mid-sized company business outlook survey" that the Federation of Middle Market Enterprises of Korea (FOMEK) released on July 2, the business outlook index for mid-sized companies rose 4.8 points to 87.6 from the previous quarter's 82.8. It was the largest increase in the past five years. The survey was conducted from May 21 to June 8 on 800 mid-sized companies.
The business outlook index uses 100 as the baseline, with higher figures meaning more corporations view the economy positively. This quarter's index climbed for four consecutive quarters, rising from a trough of 78.0 in the third quarter of 2025 to 81.4 in the fourth quarter of 2025, 82.1 in the first quarter of 2026, 82.8 in the second quarter, and 87.6 in the third quarter.
By detailed industry, manufacturing led the recovery. The manufacturing business outlook index rose 7.4 points from the previous quarter to 84.4, a larger improvement than non-manufacturing (90.6, up 2.5 points).
In manufacturing, food and beverages climbed 18.6 points from the previous quarter to 78.7, showing the strongest recovery. Primary metals and fabricated metal products (84.5), chemicals and petroleum products (88.5), and electronic components and communications equipment (91.2) also all saw their indexes rise. In contrast, automobiles and trailers fell 4.4 points from the previous quarter to 75.6.
Non-manufacturing showed differences by sector. Construction rose to 91.3, transportation to 90.2, and wholesale and retail to 94.9, while other non-manufacturing fell more than 10 points to 86.1.
The export outlook also continued its recovery. The overall export outlook index rose 6.1 points from the previous quarter to 96.0, with both manufacturing and non-manufacturing trending upward. Manufacturing recorded 96.8 and non-manufacturing 94.0.
By item, expectations for exports of electronic components and communications equipment stood out. The sector's export outlook index jumped 20 points to 107.7, surpassing the baseline. Chemicals and petroleum products also rose to 99.0, nearing the baseline. In non-manufacturing, publishing, telecommunications, and information services reached 106.1, entering the positive outlook range.
Expectations for the domestic market were also higher than in the previous quarter. The overall domestic demand outlook index rose to 90.1, and both manufacturing and non-manufacturing improved together, recording 90.7 and 89.5, respectively.
In the domestic demand institutional sector, electronic components and communications equipment was the only manufacturing sector to exceed the baseline, at 103.7. Primary metals and fabricated metal products also rose to 97.1, showing a recovery, but automobiles and trailers fell to 83.8, providing a contrast.
Outlooks for production, profitability, and financing conditions all improved. The production outlook index was 92.5, the operating profit outlook index was 89.8, and the financing outlook index was 96.2, all rising from the previous quarter.
By sales size, the business outlook of mid-sized companies with 500 billion won or more in sales improved the most. The outlook index for that bracket rose to 89.2, and corporations with less than 300 billion won also increased to 87.3. In contrast, corporations in the 300 billion to 500 billion won bracket stayed at a similar level to the previous quarter at 84.3.
Kim Hyun-chul, executive vice chair of FOMEK, said, "We must not delay discussions on improving the legal, institutional, and policy environment to build a stable foundation for long-term industrial development beyond the semiconductor boom driven by growing AI demand."