Home > Monthly BSI
2016. 12. BSI - BSI for December
Fiscal&Financial Policy Team
2016-11-30
<BSI for December>

Uncertainties spawn poor visibility in business


   The Business Survey Index (BSI), a survey of the nation's top 600 companies in terms of sales conducted by the Federation of Korean Industries (FKI), came in at 91.7 for December, staying the break-even 100 mark for seven straight months. A BSI reading below par implies companies are delivering a gloomy prediction of their business.

   Growing uncertainties at home and abroad are dampening their enthusiasm for doing business aggressively. Despite a special demand at the end of the year, their prospects for December were negative. The pessimism arises out of adverse factors such as the political unrest at home which would prevent domestic demand from recovering. Among the external elements affecting business are the so-called 'Trumpnomics' which champions protectionism and the possibility of an interest rate hike in the U.S.

   The November index for performance was 91.0, falling below par for 19 months in a row. The figure set a new record of remaining below 100 since the foreign exchange crisis in 1997.

   Meanwhile, the negative corporate sentiment lasted all through the year. Except for 102.3 for May this year, the indexes have been hovering below par. Even in February(86.3), September(95.0) and December, the nation failed to enjoy special demands. As a result, the average annual BSI hit a five-year low since 2012.

   "To put the economy on the right track, we need to enliven the sentiments of economic players. As a matter of fact, consumers and businesses have completely lost their confidence due to mounting uncertainties," an FKI official said. "Just as a body with a weak immune system is seriously affected by a minor disease, so a minor negative factor could easily trigger a formidable crisis in business which is replete with a multitude of woes," he feared.

< Comprehensive BSI by Month >

 
'15.12
'16.1
2
3
4
5
6
7
8
9
10
11
12
General Business
(Prospects)
97.5
93.2
86.3
98.3
95.7
102.3
94.8
90.5
89.5
95.0
96.0
89.8
91.7
General Business
(Performance)
95.5
92.1
87.0
94.2
97.3
97.1
91.3
89.7
90.0
92.0
89.0
91.0
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