South Korea August 2019 Business Climate Index Low

According to the findings of the Business Survey Index (BSI) released by the Korea Economic Research Institute in July 29th (2019), the forecast value of BSI in August this year was 80.7, the lowest since March 2009 (76.1). BSI is greater than 100, which means that there are more businesses in the future.

But recently, the Korean economy is facing the risk of Sino US trade friction and Japan's trade retaliation, which has led to a weakening of corporate confidence. The BSI forecast for this year has been on the low level since the financial crisis in February (81.1) and August (80.7). In particular, the BSI forecast decreased by 11.6 in August, the largest decline in nearly 10 years, while the actual value of BSI in July was 84.6, which has been lower than 100 for 51 consecutive months since April 2015 (101.3).

The Korean Economic Research Institute has conducted an investigation in from July 16th to 23rd this year to analyze the impact of Japan's export control measures on South Korean enterprises. South Korea's Economic Research Institute said that the manufacturing industry in Korea is deteriorating. In August this year, the BSI value of manufacturing industry was forecast to be 74.7, a new low since March 2009 (76.8). Manufacturing industry is unable to create high-quality employment opportunities because of the sluggishness of the economy. Jin Yinjing, head of the enterprise research office of the Korea Economic Research Institute, said the South Korean government failed to find solutions to Japan's trade retaliation, which led to more fragile corporate confidence.