Seoul: South Korea's business sentiment remains pessimistic for August, a poll showed Wednesday, as the scheduled implementation of U.S. reciprocal tariffs starting next month weighs on corporate confidence. The business survey index (BSI) of the country's top 600 companies by sales stood at 92.6 for next month, according to the monthly poll by the Federation of Korean Industries (FKI).
According to Yonhap News Agency, a reading below 100 means pessimists outnumber optimists, while a figure above the benchmark means the opposite. The index has now remained below 100 for 41 consecutive months since April 2022. The BSI for manufacturing sectors stood at 87.1, compared with 98.3 for nonmanufacturing sectors. Manufacturing sentiment has stayed negative for 17 months.
Within manufacturing, only pharmaceuticals and semiconductors showed a positive outlook. Among nonmanufacturing sectors, lodging, dining, and logistics registered positive readings on hopes of increased demand following the government's spending coupon handouts. An official from the FKI stated, "The shock stemming from U.S. President Donald Trump's tariff policy and a severe slump in demand are pushing our economy and companies into very difficult circumstances." The official further emphasized the necessity for the government to step up efforts to improve the trade environment.