Home > Monthly BSI
2017. 3. BSI - BSI for March
Fiscal&Financial Policy Team
2017-03-02
<BSI for March>

Worsening business sentiment to continue in March


   The Business Survey Index(BSI) for March shows the weak business sentiment is likely to continue. The 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 92.1 for March. A BSI reading below the break-even 100 mark means companies are delivering a gloomy prediction of their business. Affected by a poor corporate confidence, the performance index for February also slid to 88.1, hitting a 12-month low.

   Businesses are worried about the worsening export environment due to growing protectionist pressures from the U.S., China and Europe. Another adverse factor, they point out, is soaring freight charges after the restructuring of the shipping industry. The falling exchange rate is yet another stumbling block to business. The value of the Korean won went up as the economy registered the so-called a “recession-type” surplus brought about by a continued drop in both exports and imports, with imports decreasing more drastically than exports and the Trump administration could think of Korea as a currency manipulator.

   The export increase in January is regarded merely as a base effect and a lopsided effect created by brisk export of some semiconductor products. Exports in January rose 12.8% as against the same period last year but given the decrease in exports in January last year, such a rise this year cannot be considered as a recovery sign. Compared with the average exports in January over the last five years, from 2012 to 2016, exports in this January dipped by 6.7%. Excluding the export increase of semiconductors, exports in January this year fell by 14.5%, analysts explain.

   All things considered, it appears hard to regain corporate confidence in the foreseeable future. Looking at figures of the past, an index for March tends to grow sharply from a February index. Although the BSI for March this year rose from 87.7 for the previous month, the increase is smaller than that of the past.

   The business performance index for February dropped to 88.1 from January's 89.2. "On top of poor domestic demand and exports, uncertainties in the business environment keep lingering. We're concerned they might hurt investment and employment in the days to come," said an FKI official.

< Comprehensive BSI by Month >

 
'16.3
4
5
6
7
8
9
10
11
12
'17.1
2
3
General Business
(Prospects)
98.3
95.7
102.3
94.8
90.5
89.5
95.0
96.0
89.8
91.7
89.9
87.7
92.1
General Business
(Performance)
94.2
97.3
97.1
91.3
89.7
90.0
92.0
89.0
91.0
91.1
89.2
88.1
-