BSI records highest in seven years

Statistics show that business confidence has improved significantly for the second quarter of the year amid hopes that COVID-19 vaccination would help the economy bounce back.

On Sunday, the Korea Chamber of Commerce and Industry (KCCI) published the “Business Survey Index (BSI) for the second quarter,” which was conducted of about 2,200 manufactures. The BSI, which stood at 99, 24 points up from the first quarter (75), recorded the highest since the third quarter of 2014 (103). The BSI of 100 and upwards indicates that many companies feel optimistic about the next quarter, and the BSI of 100 and lower means the opposite.

By industry, the BSI for cosmetics (107), IT and home appliances (105), machinery (105), medical devices (104) and beverages (103) hovered above 100, while the figures for shipbuilding and parts (71), printing (86) and oil (90) were below 100.

“With the expansion of large-scale stimulus packages and vaccination programs in major countries, South Korean manufacturers are holding out hopes,” said the KCCI.

Meanwhile, companies saw volatile foreign exchange rates (42.9%), increasing prices of raw materials including oil (27.9%), protectionism including the trade war between the United States and China (25.5%) and economic recessions in emerging economies (24.3%) as some of the biggest “external risks that would impact overall business this year (multiple choices),” while a 4th wave of COVID-19 (77.5%), anti-business legislation (28%), changes in interest rates in South Korea triggered by an increase in U.S. treasury bond rates (27.1%) and increasing household debts (12.6%) were cited as the gravest internal risks.


Dong-Il Seo dong@donga.com