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Korean manufacturers' sentiment worsens for March

(Yonhap)
(Yonhap)

The business sentiment of South Korean manufacturers sharply deteriorated for the upcoming month, central bank data showed Wednesday, amid growing concerns that the fast-spreading coronavirus outbreak may undermine the country's already weak exports and economic recovery.

The business sentiment index (BSI) for manufacturing businesses here came to 69 for March, down from 77 for this month. It marked the lowest since February 2019 when the index stood at 65, according to the data from the Bank of Korea (BOK).

A reading below the benchmark 100 means pessimists outnumber optimists.

The sharp drop apparently follows the outbreak of COVID-19 on Jan. 20.

South Korea had reported 977 confirmed cases as of late Tuesday, with 10 deaths.

Officials and market observers here have noted the outbreak could not have come at a worse time for South Korea.

The local economy was earlier estimated to expand 2.3 percent this year, rebounding from a 2 percent on-year expansion last year that marked the slowest growth in a decade.

Many, however, believe the fallout from the spread of the deadly virus will inevitably lead to a slower growth, with global ratings agency Moody's slashing its 2020 growth outlook for South Korea to 1.9 percent from the previous 2.1 percent.

In the monthly survey of some 3,200 local companies, including about 1,900 manufacturers, both export firms and locally-focused businesses expected their business conditions to worsen in the upcoming month, with their business sentiment indices coming to 77 and 65, respectively, both down 8 points from a month earlier.

South Korea's exports have dropped for 14 consecutive months since December 2018 amid a steady decline in shipments to China, the world's single largest importer of South Korean goods.

The spread of the virus in China is expected to further reduce China's demand for South Korean products.

The BSI of non-manufacturing firms came to 68 for March, down 6 points from 74 for February. (Yonhap)



 

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