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Biz sentiment for Feb. stays below par for 2nd month: poll

(Yonhap)
(Yonhap)
South Korea's business sentiment edged up for February but remained below par for the second consecutive month amid high raw material prices and global supply chain disruptions, a poll showed Wednesday.

The business survey index (BSI) of the country's top 600 companies by sales came to 99.7 for next month, up 3.2 points from January, the Federation of Korean Industries (FKI) said.

Yet February represents the second month in a row that the monthly yardstick of business sentiment has been below the benchmark 100.

A reading below 100 means pessimists outnumber optimists, while a figure above the benchmark means the opposite.

The FKI, the lobby for the country's family-controlled conglomerates, attributed the weak February reading to concerns over soaring material costs, China's economic slowdown and global supply chain bottlenecks.

The BSI for exports stood at 97.7 for the coming month, while the index for domestic demand amounted to 100.9.

The FKI said the index for exports remains sluggish due to worries over China's supply chain, the top export market for South Korea and a logistics crunch in the United States.

Companies are also worried that their profitability and financing conditions will likely worsen in February due to the central bank's interest rate hike this month, it added.

About two weeks ago, the Bank of Korea raised its key policy rate by a quarter percentage point to a pre-pandemic level of 1.25 percent as it grapples with persistent inflation concerns and seeks to normalize protracted loose monetary measures amid the economic recovery.

The BSI for the manufacturing industry came to 94.8 for February, with the index for the nonmanufacturing sector reaching 105.7.

The FKI further said the performance BSI for January stood at 104.3, up from the previous month's 100.3. (Yonhap)

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