Aug 31, 2015
South Korean manufacturers turned slightly positive on their business prospects for September, a poll showed Monday, but the improvement was limited due mostly to nagging concerns over China's slowing growth.
The business sentiment index, which measures the outlook of manufacturers on their business conditions for the coming month, reached 71 for September, ticking up from a forecast of 70 a month earlier, according to the survey by the Bank of Korea (BOK).
A reading below the benchmark 100 means that pessimists outnumber optimists. The index has been hovering below the threshold since July 2010, when it hit 100.
While the September reading marks a second consecutive month of rise, it is still much lower than the forecast of 82 for May, when South Korea reported the first case of Middle East Respiratory Syndrome (MERS).
"While the de-facto end of the MERS outbreak somewhat helped improve sentiment, manufacturers seem to remain worried about economic uncertainties in China," explained a BOK official.
The respiratory illness took a toll on Asia's fourth-largest economy, claiming 36 lives and pummeling the local tourism and retail sector as people refrained from outings out of fear of contracting MERS.
The government announced the de-facto end of the disease late last month, but the disease has not officially been eradicated in the country, according to guidelines by the World Health Organization.
The BOK official added that the MERS outbreak had limited impact on manufacturers' sentiment in the first place, as the disease mostly affected businesses in the service sector.
The monthly poll showed that large corporations and exporters are most worried about weakening growth in China, South Korea's biggest trade partner.
The index measuring exporters' sentiment slipped to 71 from 72, while that for domestic-focused firms gained to 71 from 68.
Large firms turned slightly sour on their business outlook, with the index gauging their sentiment inching down to 73 from 74, while that of small and medium enterprises jumped to 69 from 63.
Compared with a month earlier, a larger number of the respondents picked poor domestic demand and sluggish exports as their concern. The responses that cited foreign exchange rate and fund shortage as business issues declined.
The poll was conducted on 1,794 manufacturers across the country between August 17 and 24.
Source: Yonhap News