The business conditions that corporations felt, which had improved last month, deteriorated, data showed. The Middle East war negatively affected the overall industry. Thanks to robust semiconductor exports, manufacturing held up relatively better, but nonmanufacturing did not.
According to the March business survey that the Bank of Korea released on the 26th, this month's all-industry Corporate Business Survey Index (CBSI) was tallied at 94.1, down 0.1 point from the prior month. After posting 94 in January, the CBSI rose to 94.2 in February, then edged down this month.
The CBSI is a sentiment indicator derived from five key manufacturing and four nonmanufacturing components within the Business Survey Index (BSI). If it is higher than the past average (100) from January 2003 to December 2024, it means corporate sentiment toward the overall economy is optimistic. Conversely, 100 or below indicates pessimism.
By industry, nonmanufacturing such as services fell to 92 this month from 92.2 last month. Funding conditions (-0.5p) and business conditions (-0.4p) drove the decline in the nonmanufacturing CBSI. The manufacturing CBSI was unchanged from the previous month at 97.1. Production (+0.6p) and new orders (+0.6p) were favorable, but product inventories (-0.6p) and funding conditions (-0.4p) worsened, keeping the index at the same level as the prior month.
The April CBSI outlook is 95.9 for manufacturing and 91.2 for nonmanufacturing. Compared with last month's outlook, manufacturing is down 3p and nonmanufacturing is down 5.6p. This is the largest drop since January last year (manufacturing -3.8p, nonmanufacturing -9.7p), right after the Dec. 3 martial law.
A Bank of Korea official said, "The spillover effects of the Middle East war are spreading overall," adding, "Thanks to semiconductor exports, the downward adjustment is smaller in manufacturing than in nonmanufacturing." The all-industry outlook is also 93.1, down 4.5p from the previous month.
The March Economic Sentiment Index (ESI), which combines the Business Survey Index (BSI) and the Consumer Survey Index (CSI), was 94, down 4.8p from the previous month. The ESI cyclical component, which removes seasonal and irregular fluctuations, was 96.6, up 0.4p from the previous month.
Meanwhile, this month's business survey was conducted Mar. 11–18 on 3,524 corporate corporations nationwide. Of these, 3,223 corporations responded.