BSI Trend for All Sectors

  The Federation of Korean Industries (FKI)’s Business Survey Index (BSI), a survey of the business sentiment of the largest 600 Korean companies in revenue, recorded an outlook falling short of the baseline of 100 1 for May, at 94.9. This represents a 3.7-point decrease compared to the April outlook (98.6).

  “The BSI has been on the rise 2 since February this year and approached the baseline with the outlook for April (98.6), but the index has fallen again with business confidence dropping due to the worsening situation in the Middle East,” said the FKI.

 1 If the BSI is over 100, business sentiment is more positive about the economy than the previous month and vice versa

 2 BSI Outlook trend: 91.1 (January), 92.3 (February), 97.0 (March), 98.6 (April), 94.9 (May)

  The actual BSI for April, at 94.9, also fell 1.9 points compared to the previous month (96.8).

BSI Trend for Manufacturing and Non-Manufacturing Sectors

  The outlook for May is poor for both the manufacturing (95.5) and non-manufacturing (94.1) sectors. The manufacturing sector outlook 3 rose to 100.5 in March before falling below the baseline again, now for 2 months in a row. The non-manufacturing sector outlook 4  decreased by 4.8 points compared to the April outlook (98.9) to 94.1, remaining sluggish for 5 months since January. 

 3 Manufacturing BSI Outlook: 100.5 (03/24), 98.4 (04/24), 95.5 (05/24)

 4 Non-Manufacturing BSI Outlook: 100.5 (12/23), 95.2 (01/24), 92.9 (02/24), 93.5 (03/24), 98.9 (04/24) 94.1 (05/24)

May BSI For Manufacturing Industries

  Amongst the 10 manufacturing industries, food, drink & tobacco (110.0), which is entering the peak season (several public holidays), showed a positive outlook. Wood, furniture & paper, metals & metallic products and electronics & telecommunications equipment landed on the baseline while the remaining 6 industries 5  fell below 100. Due to the drop in global demand for EVs, general machinery, precise machinery & equipment which includes secondary batteries, went from positive to negative, dropping by 30.5 points from last month’s 120.0 to 89.5. 

 5 Oil refining & chemicals (97.1), automotive & transportation equipment (94.3), general machinery, precise machinery & equipment (89.5), non-metallic materials & products (88.2), pharmaceuticals (80.0), textiles, clothing, leather & footwear (76.9)

May BSI For Non-Manufacturing Industries

  Amongst the 7 non-manufacturing industries, the leisure, accommodation & food services (128.6) had the brightest outlook due to expectations from the Family Month holidays. The professional, science, technical & project support services (107.1) industry also had a positive outlook, while the wholesale & retail (96.4) industry and the remaining 4 industries 6 all had a negative outlook.

 6 Distribution & warehousing (96.0), telecommunications (88.2), utilities (83.3), construction (81.4)

  For the May BSI, every survey field recorded a negative outlook. This is a trend that has been constant for 20 months since October 2022. The results for each field were: exports (99.5), employment (97.9), investment (96.1), domestic demand (95.9), profitability (94.9), funds (91.8) and inventory (104.6  7). In particular, domestic demand, exports and investment have all been sluggish for 23 months since July 2022. However, despite the anxiety due to the Middle East situation, exports  (99.5)  8 have been rising since February (93.7) and are approaching the baseline. 

 7 If inventory is over 100 it signifies excess inventory and thus is also negative

 8 Exports BSI Trend: 93.7 (02/24), 98.6 (03/24), 98.9 (04/24), 99.5 (05/24)

  "With the triple whammy of high interest rates, inflation and exchange rates, as well as a worsening situation in the Middle East, businesses are facing a fog of business uncertainty," said Sang-ho Lee, vice president of the FKI’s Economic and Industrial Research Department. "To stabilize business sentiment, countermeasures for external risks and efforts to stabilize inflation and exchange rates need to be strengthened.”

[Attachment 1] Outlook by Sector

[Attachment 2] Outlook by Survey Field