Business sentiment for Feb. remains negative: poll

Korea’s business sentiment for February edged up slightly but remained in negative territory due to the deepening European debt woes and concerns over the sluggish domestic economy, a poll showed Thursday.

The monthly business survey index for the upcoming month came in at 91, up 2.7 points from the 88.3 forecast for January, according to the survey by the Federation of Korean Industries, the lobbying group for the country’s large businesses.

The latest number stood below the break-even 100 mark for the fourth consecutive month since the figure fell to 96.4 in November.

The monthly index forecast for this month was the lowest since April 2009 when numbers stood at 86.7.

A BSI reading below 100 means pessimists outnumber optimists.

The poll surveyed the country’s 600 largest businesses in terms of sales.

The FKI said the still-low BSI figure is attributable to growing worries that the eurozone crisis could spread, potentially harming global economic growth. Companies polled also expressed concerns about higher international crude oil prices stemming from U.S.-led sanctions against Iran, which could fuel inflationary pressure and weigh on the country’s domestic economy.

The country’s consumer prices moved up 4.2 percent in December, exceeding an earlier target range set by the Bank of Korea.

The business federation added that companies were keeping close tabs on sluggish global economic growth that could hurt South Korea’s exports.

Reflecting this, South Korea is expected to post a trade deficit in January, the first time in nearly two years that imports would exceed exports.

By sector, the latest BSI forecasted the service industry and the manufacturing sector will struggle in February, with numbers standing at 88.8 and 92.7, respectively.

The readings for the petroleum and chemical sector stood at 80.4, with construction and engineering reaching 79.3.

The index numbers for domestic sales, exports, earnings and funding access all fell below the 100 mark, reflecting the gloomy outlook many companies have in regards to business prospects for next month. 

(Yonhap News)