The outlook for the second quarter in terms of business and sales for manufacturing corporations has shown weak results this year. Most industries expect improvements in business and sales in the second quarter compared to the first quarter, yet maintain an overall negative perspective. Manufacturers cited 'sluggish domestic demand' as the biggest obstacle to their management activities.
The Korea Institute for Industrial Economics and Trade reported on the 16th that the Business Survey Index (BSI) for the second quarter was recorded at 91 based on a survey conducted from the 17th to the 28th of last month, involving 1,487 manufacturing corporations across the nation. This figure is a 4-point increase from the previous quarter (87), but it still falls short of the baseline of 100.
A BSI above 100 indicates a positive outlook for the economic conditions compared to the previous quarter, while a figure below 100 signifies the opposite.
A representative from the Korea Institute for Industrial Economics and Trade noted, "Typically, the outlook improves in the second quarter compared to the first quarter," but added, "This survey was conducted before the announcement of the reciprocal tariff by the United States, which may lead to a deterioration in the outlook."
Specifically, the BSI for sales in the manufacturing sector for the second quarter is recorded at 95, remaining below 100. By corporation size, large corporations (102) are showing expectations of a sales rebound, while small and medium-sized enterprises (94) still foresee difficulties in recovery.
By industry, most sectors, excluding displays, chemical, and bio-health, anticipated a decrease in sales for the second quarter. The information and communications technology (95), machinery (94), materials (94), and new industries (96) segments all fell below 100.
The outlook for domestic demand (94) and exports (96) also saw slight improvements compared to the previous quarter but still remained below 100. Capital investment (96) and employment (97) outlooks also increased slightly but did not surpass the benchmark.
The biggest operational difficulties identified by corporations (multiple responses possible) were 'sluggish domestic demand and inventory accumulation' (52%), followed by ▲sustained external uncertainty (43%) ▲pressure from high exchange rates and rising material costs (36%), among others.
Moreover, corporations expressed concerns that the tariff policy of the Trump administration would negatively impact ▲the price competitiveness of key products ▲increased transaction costs and reduced profits ▲investment stagnation.
However, 4 out of 10 corporations (42%) reported having no significant countermeasures in response. They mentioned cost reduction, strengthening product competitiveness, and exploring overseas markets as alternatives.
Meanwhile, the BSI for domestic manufacturing sales in the first quarter stood at 77, marking the lowest level in eight quarters. Sales decreased in most sectors, including secondary batteries (69), semiconductors (70), wireless communication devices (71), and textiles (72). The information and communications technology (75) and new industries (77) showed a declining trend for the third consecutive quarter, and the machinery (79) and materials (77) sectors also turned down.
In terms of sales amount, both large corporations (95) and small and medium-sized enterprises (76) fell below 100, with large corporations maintaining a level similar to the previous quarter, while small and medium-sized enterprises experienced greater declines compared to the previous quarter (84).