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 of 84.6 for January 2025, falling short of the baseline of 100¹⁾ for 2 years and 10 months since April 2022 (99.1). This marks the longest-ever period of back-to-back negative BSI figures since the beginning of the survey in 1975.

 1)  A BSI outlook that surpasses 100 signifies positive business sentiment for the overall economy, relative to the prior month, and vice versa.

  Among the 10 industries in the manufacturing sector, ▸Electronics & telecommunications equipment (105.3) reported the only positive outlook. Aside from ▸Pharmaceuticals (100.0), the outlook for the remaining 8 industries⁵⁾ are negative.

 5)  ▸Textiles, clothing, leather & footwear (53.8) ▸Non-metallic materials and products (78.6) ▸Food, beverage and tobacco (82.4) ▸Metals and processed metal products (82.8) ▸General machinery, precision machinery and equipment (84.2) ▸Petroleum refining and petrochemicals (85.2) ▸Automobiles and other transportation equipment (85.3) ▸Wood, furniture and paper (87.5)

  Among the 7 industries in the non-manufacturing sector, ▸Transportation and storage (103.8) reported the only positive outlook. Aside from ▸Electricity, gas, water supply (100.0), and ▸Leisure, accommodation & food services (100.0), which were on the baseline, the outlook for the remaining 4 industries⁶⁾ are negative.

 6)  ▸Construction (68.2) ▸Professional, scientific, technical & business support services (78.6) ▸Information and communication (81.3) ▸Wholesale and retail (83.3)

  It is FKI’s view that the non-manufacturing sector’s business sentiment will improve around the Transportation and storage sector, in which direct demand increases are expected at the year’s end and start of the new year.

  In all survey fields among the January BSI⁷⁾⁸⁾, all items indicate negative business sentiment. The 3 survey fields, Domestic demand (88.6), Exports (90.2), Investment (89.4) have all been negative for 7 consecutive months since July 2024.

 7)  ▸Domestic demand 88.6 ▸Investment 89.4 ▸Employment 90.0 ▸Exports 90.2 ▸Financial condition 92.1 ▸Profitability 94.0 ▸Inventory 104.9 

 8)  Inventory surpassing the baseline (100) indicates negative outlook

  Notably, the BSI for Domestic demand (88.6) reached record lows in 52 months since September 2020 (88.0) and the BSI for Exports (90.2) was the lowest in 51 months since October 2020 (90.2), recording negative outlooks for both domestic demand and exports. The BSI for Investment (89.4) recorded the lowest figures in 21 months since April 2023 (88.6).

  Sang-ho Lee, head of FKI’s Economic and Industrial Research Department remarked, “There are heightened concerns, including higher exchange rate volatility⁹⁾ and prolonged slowdowns in domestic demand¹⁰⁾, due to external corporate management landscape shifts, including the incoming Trump administration. He maintained, “Concentrated efforts are needed to revive the economy, including measures to stabilize the exchange rate and support to revitalize industries.¹¹⁾ Additionally, there is a need to refrain from discussions of legislative activities¹²⁾ which may exacerbate corporate management uncertainties.

 9)  KRW/USD exchange rate trends (at period-end) : 1,270.0 (December 2022)→ 1,294.0 (December 2023)→ 1,450.6 (December 20, 2024)

 10)  Q3 Retail sales indices recorded -1.9%, YoY, indicating a decline for 10 consecutive quarters

 11)  ex) Special Act on the Semiconductors Industry, Special Act on Securing Core National Power Grids, and extending the sunset period for R&D tax credits for national strategic technologies

 12)  ex) Amendments to the Commercial Act to expand the duty of loyalty by directors to shareholders, etc.