Business sentiment for July pessimistic over prolonged manufacturing slump: poll

South Korea’s business sentiment remains pessimistic for July, a poll showed Wednesday, as a protracted downturn in manufacturing continues to weigh on corporate confidence.

The business survey index (BSI) of the country’s top 600 companies by sales stood at 94.6 for next month, according to the monthly poll by the Federation of Korean Industries (FKI).

A reading below 100 means pessimists outnumber optimists, while a figure above the benchmark means the opposite. The index has now remained below 100 for 40 consecutive months since April 2022.

The BSI for manufacturing sectors stood at 86.1, compared with 103.4 for nonmanufacturing sectors. Manufacturing sentiment has stayed negative for 16 months, while the service sector index rebounded for the first time in seven months.

Within manufacturing, only the food, beverage and tobacco sectors combined showed a positive outlook. Among nonmanufacturing sectors, lodging, dining, logistics and retail led the gains.

“Service sector business confidence is showing signs of recovery due to expectations for fiscal stimulus and summer travel demand,” an FKI official said. “But bolstering export competitiveness and the preemptive response to trade friction remain critical for the recovery of manufacturing industries.”