As instability in the Middle East has grown following U.S. and Israeli airstrikes on Iran, the outlook for Korea's manufacturing sector has deteriorated rapidly. For the first time in 10 months, pessimistic views have outpaced optimistic ones.
The Korea Institute for Industrial Economics & Trade (KIET) said on the 22nd that a survey of the Professional Survey Index (PSI) of 132 industry-specific experts conducted from the 9th to the 13th showed the April manufacturing outlook PSI plunged 29 points (p) from a month earlier (117) to 88. This is the first time since the June outlook last year that it has fallen below 100.
A PSI closer to 200 means more respondents think conditions improved from the previous month, while a reading below 100 and nearer to 0 means more think conditions worsened.
By component, the export outlook index plunged from 130 in March to 91 in April, down 39p, and domestic demand also fell from 125 to 98 over the same period, down 29p. Production (126→97), profitability (112→88), and investment (116→103) also fell by more than 10p.
By industry, the chemical outlook index fell 68p, from 121 in March to 53 in April. It is analyzed to reflect disruptions to crude oil imports due to the blockade of the Strait of Hormuz. In addition, the automobile (-52p, 70), machinery (-37p, 70), electronics (-33p, 80), and textile (-30p, 70) sectors also fell by more than 30p. In contrast, semiconductors (-31p, 147) saw a worsened outlook but still far exceeded the baseline and continued to grow.