Manufacturing Industry Prospects Best in Fifteen Years

Manufacturing industries` prospects are to be very bright for the next third quarter (from July to September), with expectations of greatest activity in fifteen years. The Korea Development Bank reported on the ninth that the third quarter`s business survey index(BSI) of 1218 Korean manufacturers was 128, the highest since the second quarter of 1987.

If the BSI figure goes over 100, it means that more people are estimating the business conditions to improve than to slowdown. Industries with brightest prospects were electronic parts makers(152) and pharmaceutical companies(152), followed by electric/electronic industries(143), cement(139) and steel(138) companies.

The Korea Development Bank explained that the high score of the electronic parts makers resulted from anticipations on the increase of domestic demand and export, due to personal computer alterations, cuts in PC prices and overall recovery in the IT sector.

The fact that prescriptions on expensive drugs had increased due to the separation of pharmacy and clinic and that medical practitioners market is expanding worked as key factors for high assessments on pharmaceutical companies.

Survey index on domestic demand also came out quite high, 129. Increase in consumer spendings in accordance with the economy`s recovery and hopes for better conditions in construction sector account for this number. Prospects of the IT sector`s return to prosperity boosted the survey index of export to 123.

Equipment investment index scored 109, after 104 in the first and 112 in the second quarter, marking three months-in-a-row over 100, gathering momentum in its expectation of recovery in equipment investment.

Do-Young Kim nirvana1@donga.com