Seoul: Business sentiment in South Korea experienced a slight decline in January, primarily due to a downturn in the nonmanufacturing sector, despite robust export figures. The change is attributed to diminishing year-end base effects, as revealed in a survey conducted by the Bank of Korea (BOK) on Tuesday.
According to Yonhap News Agency, the Composite Business Sentiment Index (CBSI) for all industries fell to 94 this month, a 0.2 point drop from December. This decline follows two consecutive months of rising sentiment, which peaked at 94.2 in December-the highest since July 2024-before retreating in January.
The survey indicated a mixed outlook across sectors; the sentiment index for nonmanufacturers decreased by 2.1 points to 91.7, while the index for manufacturers saw a rise of 2.8 points to 97.5. A reading below 100 on the index signals that pessimistic views outweigh optimistic ones.
A BOK official noted, "The sentiment among manufacturers improved on the back of increased exports, but that among nonmanufacturers deteriorated due to the fading of year-end seasonal factors." The official further explained that December's sentiment was bolstered by Black Friday promotions and a surge in Chinese tourists during the winter holiday season, which boosted retail sales and nonmanufacturing activities.
The survey, which was conducted earlier this month, included responses from 3,255 companies, comprising 1,815 manufacturers.