South Korean companies continued to suffer heavy setbacks in their sales and profits in the third quarter, central bank data showed Tuesday, apparently due to a sharp decline in exports and slowing demand at home.

The average sales of local companies plunged 2.8 percent from a year earlier in the three months that ended Sept. 30, according to the data from the Bank of Korea.

It compares with a 1.1-percent on-year dip in the second quarter.

The BOK did not provide any specific reason for the drop, but the country's exports have been on a steady decline since December 2018 in the face of the lengthy trade row between the United States and China -- the country's top two trading partners -- and a sharp decline in prices of chips, a key export item for Asia's fourth-largest economy.

The sales of manufacturing firms shrank 3.8 percent on-year in the July-September period, accelerating from a 1.7 percent on-year drop in the second quarter, while those of non-manufacturing industries slipped 1.4 percent in the third quarter, also accelerating from a 0.3-percent drop three months earlier.

With a sharp drop in sales, local companies also suffered a setback in their profitability with their operating profit to sales ratio declining to 4.8 percent in the third quarter from 5.2 percent in the April-June period.

Their debt ratio, on the other hand, remained unchanged at 83.5 percent.

The quarterly report is based on a survey of 3,764 local businesses, including 2,301 manufacturers, with more than 12 billion won ($10.3 million) in assets that are subject to external audits. (Yonhap)