Economic Sentiment of Manufacturing Rises for 3rd Month

The economic sentiment of manufacturers has grown for three consecutive months, reaching the highest level in seven and a half years.

The Bank of Korea yesterday announced the results of a survey on 2,310 companies conducted March 16-23 called the Business Sentiment Survey. The poll found that the business survey index this month jumped five points from February to 99, the highest since the third quarter of 2002, when the central bank began releasing the data every quarter.

An index of more than 100 means the number of companies with a positive economic outlook is larger than those with a negative outlook.

The business survey index for March was 114 for sales and production, 103 for facility investment, 110 for new orders, and 115 for operational rate, setting new highs since the second quarter of 2002. The index of large corporations jumped 11 points from the previous month to 108 and that of small and medium-size companies grew two points from a month ago to 94.

Many companies said the economy will continue to grow, so expectations for recovery of perceived economic sentiment have heightened. The forecast for the business survey index in manufacturing in April is 110, the highest since 111 in the fourth quarter of 2002. The business survey index in human resources is forecast at 89, however, meaning the job market will see little or no improvement.

The business survey index for non-manufacturers in March stayed unchanged at 86 and that for April is forecast to fall three points.

weappon@donga.com