BSI for Manufacturing Sector Worsens

South Korean companies’ business sentiment rebounded for the first time in five months in May as domestic consumption is showing signs of recovery thanks to the government’s distribution of emergency coronavirus relief funds.

The Bank of Korea announced on May 27 that the business survey index (BSI) for all industries came to 53 in May, up 2 points from April. The index had dropped for four straight months before plunging to the lowest point in over 11 years in April.

The outlook index for all industries for June also gained 3 points on-month to 53, the first rebound in four months.

The Business Survey Index (BSI) is compiled to grasp the business conditions for the current month and their outlook for the month following, by conducting surveys on entrepreneurs’ perceptions of them. A reading below 100 means pessimists outnumber optimists.

By sector, the BSI on business conditions in the manufacturing sector stood at 49 in May, down 3 points from the previous month, and that for the outlook for the following month also fell by 1 point to 49.

In the non-manufacturing sector, the BSI on business conditions for May was 56, up 6 points from the previous month, and that for the outlook for June also rose by 6 points to 56.

The Economic Sentiment Index (ESI) -- a composite of the BSI and the CSI (Consumer Survey Index) -- for May 2020 was 57.8, up 2.1 points from April 2020.

The ESI is compiled to comprehensively grasp the private sector perception of economic conditions, including the sentiments of both businesses and consumers.

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