Discouraging of Business Prospects for Next Year

Domestic enterprisers seem to say that the business prospects of next year will discourage.

According to Korea Chamber of Commerce & Industry (KCCI) on December 1, as the results of the company business prospects of the next first quarter (Jan. ~ Mar.) for 1,485 manufacturing companies throughout the country, the Business Survey Index (BSI) was 88.

When BSI is less than 100, many companies are discouraging about the business over companies with optimistic view.

As BSI by quarter has continued to decrease for three quarters from 133 of the second quarter, unsteady psychology of enterprisers has been spread.

The analysis said that the business conditions have been worse because an industry for domestic demand has been rapidly depressed. As the financial institutions have increased the loan rate and executed the loan collection and limits reduction for delinquent customers owing to a restraint on the household loans of the government, the actual consumption has been contracted.

The export index was 99. Even though the exports are going up at the increase rate of two digits after the second quarter, the export prospects will discourage for next year because of uncertain exports environment and uneasiness of US economy.

Accordingly, such as a capacity utilization, funds condition, production and price of raw material, most of BSI prospects fall short of 100 and so an ordinary income(81) will be depressed.

Including a petrochemistry, steel, machine, shipping, auto, electron and semiconductor, BSI of the main industries fall all short of 100. SO, it warns a thorny start of Korean economy for 2003.

Park Hyeong-seo, head of management investigation team, KCCI emphasized, “As the business prospects are uncertain and discouraging, people have worried about the economic depression for next year. We need to promote the equipment investment and domestic demand owing to a maintenance of basic low interest conditions.”

Kang-Woon Lee kwoon90@donga.com