The outlook for the manufacturing industry, which seemed to be resolved as the re-proliferation rate of the novel coronavirus infection (Corona 19), fell again after three months. However, for semiconductors, optimism was higher than last month in anticipation of a global demand recovery.
Manufacturing outlook PSI in 3 months↓
Manufacturing PSI Index. Industrial Research Institute
According to the’Expert Survey Index (PSI)’ released on the 27th by the Korea Institute of Industry, the overall outlook for the manufacturing industry in January next year (117) fell slightly from December this year (120). It is the first time in three months that the manufacturing outlook PSI has fallen from the previous month.
The PSI index, commissioned by the Korea Institute of Industry and Technology to F&Guide Metrics, is based on surveys of 171 experts in 238 industries about current and future business conditions. After asking an expert about the situation such as demand, supply, and profit in each industry, the response results are aggregated in the range of 0 to 200. It means that the higher the index, the better the industry, and when it exceeds 100, there were many answers that the industry was better than the previous month. The PSI index is divided into a current PSI representing the current situation and a prospect PSI representing the future prospect.
In the forecast PSI for January next year, domestic demand (121→102) fell by two digits from the previous month. Compared to the December domestic demand outlook (121), which remained at the same level as in November, it is a sharp decline. The outlook for exports (118→109) and production (111→107) also worsened for two consecutive months compared to the previous month. However, investment amount (96→110) rebounded from December and exceeded the average of 100.
In addition to the outlook for next year, the PSI (120) of the manufacturing industry this month also fell sharply from November (133). In particular, both domestic demand (112) and export (117) PSIs fell from the previous month in 9 and 8 months, respectively. The outlook has improved every month since March and April, when the spread of Corona 19 was at its peak, but the atmosphere changed. Production (123→104) also fell by double digits compared to the previous month and stopped rising after four months.
“The manufacturing industry contracts due to the re-proliferation of Corona 19”
The biggest reason for the decline in optimism about the manufacturing industry is the re-proliferation of Corona 19. As the domestic and overseas situation worsened from December, the negative outlook for manufacturing industries that are relatively less affected by Corona 19 than the service industry has increased.
“It is true that there are still many responses saying that the PSI index has improved from the previous month,” said Min Seong-hwan, a research fellow at the Institute of Industry and Technology. There seems to be one effect.”
By industry, the material (127→107) decline was remarkable in the January next year outlook PSI. This is because the outlook for clothing sales in winter was not good as the cold weather continued even in winter. In the field of equipment (127→122), the optimism evaluation decreased slightly compared to the previous month.
However, in the field of ICT (109→118), which is a field of electronics and communication, the outlook for the industry in January next year improved. However, the current PSI index for December fell sharply compared to November in ICT (124→120), equipment (130→119), and materials (143→120). Equipment fell in three months, and materials were the lowest since June.
Semiconductor propaganda stands out… Optimistic evaluation↑
PSI index by industry. Industrial Research Institute
ICT outlook for January next year The PSI has improved because of the semiconductor market. Semiconductor’s current PSI in December also surpassed 100 in six months, and the forecast PSI for January next year exceeded 100 for the first time since July. This is because there is a high expectation for a global semiconductor demand recovery to the extent that a’super cycle’ is expected. In particular, if the semiconductor industry, which has a large portion of the manufacturing industry, improves, it could lead to improvement in other materials and equipment sectors in the medium and long term.
However, other industries except semiconductors were still sluggish. The textile sector’s outlook for January next year fell below 100 in eight months. In addition, business sectors sensitive to the economy, such as displays, automobiles, home appliances, chemicals, steel, and textiles, still fell in PSI compared to December this year. In the December PSI index, all industries except for semiconductors, shipbuilding and steel fell, and the overall manufacturing industry seemed to contract.
Sejong = Reporter Kim Namjun [email protected]