On May 27, the Bank of Korea said the business conditions felt by corporations in May turned "optimistic." It is the first time in 3 years and 9 months since Aug. 2022 that manufacturing corporations felt conditions were optimistic. Corporate sentiment improved on strong semiconductor exports.
According to the Bank of Korea's "May Business Survey and Economic Sentiment Index," the Composite Business Survey Index (CBSI) for all industries rose 4 points from the previous month to 98.9. A business sentiment index above 100 is optimistic, and below 100 is pessimistic.
By industry, the manufacturing business sentiment index rose 1.7 points over the same period to 100.8. Many manufacturers thought conditions and cash flow improved. Among manufacturers, large corporations rose 3.4 points to 103.4, while small and midsize corporations fell 0.6 point to 96.2. The non-manufacturing business sentiment index, including services, rose 5.4 points to 97.5.
However, the biggest management difficulty for manufacturing was the rise in raw material prices at 32.8%. An uncertain economic situation was 17.7%, and weak domestic demand was 15.5%. Compared with the previous month, weak domestic demand rose 1.7 percentage points. The uncertain economic situation fell 1.6 percentage points, and the exchange rate fell 1.5 percentage points.
The June outlook for the all-industry business sentiment index was found at 97.6, up 3.7 points from the previous month. Manufacturing rose 2.3 points to 100.3, and non-manufacturing rose 4.7 points to 95.9.
The Bank of Korea said, "Manufacturing saw strong exports centered on IT products such as semiconductors," and noted, "Non-manufacturing rose on improved conditions in transportation and warehousing and in wholesale and retail."