Business sentiment is cooling down

Business conditions in the field are growing chilly.

The Bank of Korea announced Thursday that the Business Survey Index showed economic growth slowed in the third quarter (Jul.-Sept.) this year and this downtrend will be carried over into the fourth quarter (Oct.-Dec.).

The BSI for the manufacturing sector during the third quarter registered 97, down from 102 in the previous quarter. The poor result seemed attributable to contracted business sentiment following the rise in oil prices and the credit crunch of some large-sized conglomerates. It is the first time since the Jan.-Mar. period of 1999 that the manufacturing BSI fell below 100.

The BSI is an index reflecting the opinions of businesspersons on economic trends. A ranking of over 100 means that more people have a positive view of economic prospects.

For the fourth quarter, the BSI for the manufacturing sector was 107, indicating that many are expecting better business conditions. But this figure was down from 110 registered in the previous quarter, representing slower growth.

Meanwhile, the BSI of the facility investment for the fourth quarter recorded 101, down from 104 in the previous quarter, and the BSI for profitability stood at 86, down from 92 in the preceding period, reflecting that prospects for facility investment and profitability were riding a downward curve.

Park Hyeon-Jin witness@donga.com