Manufacturer’s Q3 sentiment hits 7-year high on vaccine rollout

South Korean manufacturers’ business sentiment reached a seven-year high for the third quarter this year, as the global economy shows signs of recovery amid vaccine rollouts against the coronavirus pandemic, a poll revealed Wednesday.

According to the Korea Chamber of Commerce and Industry, the Business Sentiment Index, which it compiles quarterly, stood at 103 for the July-September period, up four points from the previous quarter. It was the first time in seven years that it surpassed a reading of 100. A reading above 100 means optimism outweighs pessimism.

By category, the index stood at 112 for exports and at 101 for domestic demand.

The KCCI conducted the BSI poll to about 2,400 manufacturing companies in the country.

The positive outlook appears to have been affected by a recovery in shipments and vaccine rollouts -- here and abroad -- according to the KCCI.

“As major countries, such as the United States and China, are experiencing economic recovery, South Korea has witnessed its exports grow by over 40 percent in the past two months. Also, with vaccine rollout speeding up, the anticipation for economic recovery here appears to have been reflected (in the BSI),” the KCCI said.

In the first half of this year, South Korea has had over 15 million people, or some 30 percent of its total population, inoculated with at least one shot of a COVID-19 vaccine. The government aims to vaccinate 70 percent of its 52 million population by November to achieve herd immunity.

In another positive sign, the country’s industrial output rebounded in May, increasing slightly by 0.1 percent from the previous month, data compiled by Statistics Korea showed.

The increase in industrial output came from production in the public administration sector, jumping 8.1 percent on-month as the government increased spending on COVID-19 vaccine purchases.

Exports also jumped 45.6 percent on-year for the month, according to the statistics agency.

Manufacturing output and retail sales, however, declined, by 1 percent and 1.8 percent, respectively, when compared to the month earlier in May.

Still, in the KCCI poll, 49.3 percent of responding companies said they expect to fulfill or overachieve their target performance in the first half of the year. The rest of the companies did say they would not achieve their target goal, but the figure stands lower than the 60.6 percent surveyed for the third quarter in 2019, KCCI added.


By Jo He-rim (herim@heraldcorp.com)