“Rapid Cooling–down Of Consumption Psychology and Continued Slow-down of Business”

Samsung Economic Research Institute said. “the `Current Business Judgment Index` most closely related to the business felted by the consumers changes 6 to 9 months prior to the whole business” and forecasted, “In consideration of this index having failed to reach even 40 the trend of the slowdown of domestic business will be continued for the time being.”

The Consumption Expenditure Index representing the current level of consumption expenditure compared to that one year ago was indicated as 49.9 in the first quarter. It is the first after 5 quarters (one year and three months) that the Consumption Expenditure Index fell below the standard figure.

Along-with this, the Price Expectancy Index hiked 0.1 point to 75.5 compared to that of the fourth quarter last year. If the Price Expectancy is over 50, it means that the psychology of price instability is increasing.

The business of service and construction industry influencing the employment is in a greatly deteriorating trend.

The Korea Development Institute, a public research institute, explained in the monthly economic trend announced that day that the production of manufacturing industry maintained the high level of increasing trend, and added that the increasing trend of service industry has been greatly dulled. It said that the production growth rate of financial and insurance industry declined to 5.1% in November from 11.1% in October last year and also said that the production growth rate of transportation, warehousing and telecommunication declined to 5.8% from 10.6 during the same period respectively.

The Korea Development Institute said, “If the oil price hikes, it is estimated that the real purchasing power can not follow the production growth rate.” and analyzed, “Due to this the expectancy index of the economic subjects including enterprises and people is shrinking greatly.”

It also added, “The Consumer Evaluation Index and the Consumer Expectancy Index all failed to reach 100, the standard figure, for 3 consecutive months from October till December last year.”

On the other hand, the Construction & Economy Research Institute of Korea revealed that the BSI of construction companies was surveyed as 77.2 January this year. This is the lowest figure for two years and two months since November (75.5) in 2000.

The index showed a temporarily improving figure benefiting from the seasonal factors after it continued to stand at below 100, a standard figure, from July till November last year.