A prospect has been made that the manufacturing industry, the mainstay of the Korean economy, will face more difficulties in the third quarter of this year. Considering Japan's export restriction measures, the Korean manufacturing industry may feel less confident.
On July 14, the Korea Institute for Industrial Economics and Trade surveyed 1,050 Korean manufacturing companies with respect to the business survey index (BSI). Their third-quarter market BSI and sales BSI were 90 and 96, the survey found. They fell by eight points and six points, respectively, from the previous quarter.
If the BSI is above 100, the economy will be better than the previous quarter and if it is lower than 100, the economy will be the other way around.
The domestic demand and export BSI figures which surpassed 100 in the previous quarter, also dropped to 95 and 98, respectively. The equipment investment (98) and employment (98) BSI figures also fell below 100.
By industry, the electronics (107), chemicals (102) and precision instrument (107) BSI figures remained above 100, but the machinery equipment (89), steel (89) and electrical machinery (94) BSI figures did not. The semiconductors (94), automobiles (92), shipbuilding and other transportation (99) BSI figures remained at levels similar to those of the previous quarter.
This is in contrast to the fact that the current BSI which reflects manufacturing performances in the second quarter rose sharply from the previous quarter. The market and sales BSI figures rose to 88 by 11 points and to 95 by 20 points from the previous quarter. Domestic consumption (92) and export (96) BSI figures also improved significantly. Sales BSI figures turned for double-digit growth in all types of the manufacturing industry.
The survey was carried out before Japan imposed restrictions on the export of core semiconductor materials to Korea on July 4 so that an outlook on the manufacturing industry can further deteriorate.