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Business sentiment worsens for the first time in three months due to inflation and economic concerns

June industry BSI 4 points ↓ · Outlook BSI 5 points ↓

Corporate building seen from Namsan in Seoul

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(Seoul = Yonhap News) Reporter Shin Shin-kyung = Business sentiment has deteriorated overall due to concerns about inflation and economic slowdown.

According to the results of the ‘June Business Due Diligence Index (BSI)’ survey released by the Bank of Korea on the 30th, the BSI for all industries this month was 82, 4 points (p) lower than in May (86).

Trend of Business Due Diligence Index (BSI)
Trend of Business Due Diligence Index (BSI)

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BSI is a statistic calculated based on the entrepreneur’s judgment and outlook on the current business situation. If there are more negative responses than positive responses, the index falls below 100.

This month’s survey was conducted on 3,255 corporate companies from the 15th to the 22nd, and 2,800 companies (1,653 manufacturing and 1,147 non-manufacturing companies) answered the questionnaire.

BSI, which fell to 83 in March, rose to 86 in April due to the lifting of social distancing, and maintained the same level in May, but turned to a downward trend in three months.

By industry, the manufacturing industry BSI (83) fell by 3 points, and the non-manufacturing industry BSI (82), such as the service industry, fell 4 points.

Among manufacturing sub-sectors, non-metallic minerals (-18 points) and chemical products (-15 points) with narrow spreads (difference between raw material prices and product prices), which were particularly affected by the supply disruption caused by the burden of raw material prices and the strike wide was

By manufacturing size, large companies and SMEs each fell by 3 points, and export companies (-7 points) felt worse than domestic companies (-1 point).

Among non-manufacturing industries, the transportation and warehouse industry (-9 points), construction industry (-7 points), and wholesale and retail industry (-6 points) showed a marked decrease in BSI due to strong raw material prices such as oil and weakened consumer sentiment due to inflation.

On the other hand, as the number of sports and leisure users increased after the lifting of the distance, the arts, sports and leisure industries jumped 15 points.

Kim Dae-jin, head of the corporate statistics team at the BOK’s Economic Statistics Bureau, explained, “Companies’ business conditions have worsened due to concerns about an economic slowdown caused by rising raw material prices and logistics costs due to the prolonged crisis in Ukraine, continuing inflation, and interest rate hikes in major countries.”

The BSI index (82) for the July industry outlook, not the June performance, also fell by 5 points.

It fell by 4 points in the manufacturing industry (83) and 5 points in the non-manufacturing industry (81).

June’s Economic Sentiment Index (ESI), which includes the Consumer Trend Index (CSI) in the BSI, was recorded at 102.5, 4.2 points lower than in May.

shk999@yna.co.kr

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2022/06/30 06:00 Send