Manufacturing sentiment dips for Q4 on COVID-19 resurgence

A survey of about 2,300 manufacturing firms put the business sentiment index (BSI) at 91 for the October-December period, down 12 points from the third quarter, the Korea Chamber of Commerce and Industry (KCCI) said.

A reading below 100 means companies expecting deteriorating business conditions outnumber those that anticipate an improving situation.

The business lobby said a recent resurgence in COVID-19 has resulted in tougher social distancing rules, putting the brakes on the recovery of domestic demand.

SEOUL, Sept. 28 (Yonhap) -- A majority of South Korean manufacturers expect their business conditions to worsen in the fourth quarter from three months earlier on a coronavirus resurgence and rising material costs, a poll showed Tuesday.

A survey of about 2,300 manufacturing firms put the business sentiment index (BSI) at 91 for the October-December period, down 12 points from the third quarter, the Korea Chamber of Commerce and Industry (KCCI) said.

A reading below 100 means companies expecting deteriorating business conditions outnumber those that anticipate an improving situation.

The business lobby said a recent resurgence in COVID-19 has resulted in tougher social distancing rules, putting the brakes on the recovery of domestic demand.

Local companies are also burdened by increasing raw material prices stemming from a supply bottleneck amid rising demand, it added.

The outlook for exports stood at 94 for the coming quarter, down 18 points from the current quarter. The BSI for domestic demand came to 90, 11 points lower than the third quarter.

The gloomy forecast comes despite surging exports. South Korea's exports soared 35 percent on-year in August, with overseas shipments climbing 22.9 percent in the first 20 days of September.

The survey also showed nearly 84 percent of the respondents predicting the Korean economy not to grow in the 4 percent range, as forecast by the central Bank of Korea (BOK).

Those companies cite slumping domestic demand resulting from the coronavirus resurgence, volatility of foreign exchange rates and material costs, and the BOK's tight monetary policy as internal and external risks for their management, according to the findings. (Yonhap)