Corporations' perception of the economy turned upward for the first time in five months. This is due to improvements in both the manufacturing and non-manufacturing sectors in terms of business conditions and financial situations. However, the outlook for next month is expected to decline, making it difficult for the economic recovery to sustain.
According to the 'Corporate Business Survey Results and Economic Sentiment Index (ESI)' announced by the Bank of Korea on the 26th, the overall corporate sentiment index (CBSI) this month has increased by 1.4 points (p) to 86.7 compared to the previous month. This marks an upward turn for the first time in five months.
CBSI refers to a sentiment indicator calculated based on key indices (five for manufacturing and four for non-manufacturing) from the Business Survey Index (BSI). If it exceeds the long-term average (100) from January 2003 to December 2023, it indicates optimistic corporate sentiment about the overall economy; if it falls below that, it indicates pessimism.
By industry, the manufacturing CBSI recorded an increase of 1.8 points to 91.9 compared to the previous month, indicating improvements in both business conditions and financial situations. The non-manufacturing CBSI increased by 1.2 points to 82.9 compared to the previous month, as improvements in business conditions and financial situations also drove the recovery of corporate sentiment.
However, corporations forecast that their perception of the economy will decline again next month. This is believed to be due to the imposition of mutual tariffs in the U.S. approaching April 2. The outlook for the overall corporate sentiment index (CBSI) has decreased by 2.4 points to 85.6 compared to the previous month, with manufacturing down by 1.2 points and non-manufacturing down by 3.4 points.
The economic sentiment index (ESI) reflecting the Consumer Sentiment Index (CSI) has recorded a decrease of 3.0 points to 87.2 compared to the previous month. The seasonally adjusted cyclical volatility figure is 87.3, down by 1.0 point from the previous month.
Lee Hye-young, head of the economic psychology survey team at the Bank of Korea, noted, "There is uncertainty as nothing has been specifically determined about how the mutual tariffs will be applied next month, so we need to watch it a bit longer," but she also stated that "in principle, businesses are anticipating negative outcomes."