February’s business experience,’manufacturing’ worsened and’non-manufacturing’ improved

The business experience of companies has slightly retreated. The non-manufacturing industry improved, but the manufacturing economy worsened even more.

According to the’February 2021 Business Survey Index (BSI) and Economic Sentiment Index (ESI)’ released by the Bank of Korea on the 24th, the BSI for all industries fell 1 point from the previous month to 76. The business due diligence index is an index that examines the judgment and prospect of businessmen’s current management situation. If there are many companies that responded negatively, the index is below 100.

The manufacturing industry BSI was 82, down 3 points from the previous month. The spread of chemicals (product price minus raw material prices) improved by 11 points, but metal processing (-10 points) and electronic, video, and communication equipment (-5 points) fell more significantly. Rising raw material prices and slowing demand for downstream industries have had a combined impact.

By company size, large companies increased by 2 points, while SMEs decreased by 9 points. By type, both export companies (-2 points) and domestic companies (-4 points) decreased.

The non-manufacturing BSI rose 2 points to 72. This is the result of the rise in construction (3 points) and wholesale and retail (2 points). An official from the BOK explained, “The construction orders recovered from January, which was the off-peak season, driving growth.”

There were many views that the future situation would be better than now. The BSI for the manufacturing industry for next month was 85, up 4 points from the previous month, and for the non-manufacturing industry by 3 points, respectively.

The Economic Sentiment Index (ESI) recorded 96.6, up 3.5 points from the previous month. The cyclical fluctuation calculated by removing seasonal and irregular fluctuations from the ESI was 95,1, up 2.7 points from the previous month.