July 7, 2022

The Bank of Korea (BOK), reported the country’s manufacturers’ business sentiment to improve for January. This is attributed on the optimism that the country’s exports despite the global pandemic continue to be strong.

According to the data from the Bank of Korea, the business sentiment index (BSI) for local manufacturers came to 92 for December, up from 88 for this month.

January’s rise in manufacturers’ BSI is determined in part by expectations that the country’s strong exports, will continue including those of overseas sales of semiconductors.

Government data showed that the country’s exports in November rose 32.1 percent on-year to reach an all-time monthly high, this was on the back of strong global demand for chips and oil products.

The BSI for large companies for next month stood at 99, up from 97 for this month.

However, the data showed that the BSI of non-manufacturing businesses, worsened from 83 for December to 78 for January.

While the decline is blamed on persistent concerns over the global pandemic along with seasonal factors, such as potentially less activity during the winter season.

According to the data, the fall reduced mostly from worsened outlooks for construction sectors and information and communications.

The central bank also reported the country’s terms of trade hit a near nine-year low in November. This has been attributed to fast rising import costs than export prices.

According to central bank’s preliminary data, the nation’s net terms-of-trade index for goods came to 88.27 last month, down 10.1 percent from a year earlier, thus representing the lowest level since March 2013.

Import prices in November soared 33.4 percent from a year earlier, while those of exported goods climbed 20 percent.

In the meantime, the index for the value of imported goods rose to an all-time high in the same month by 159.29 due to soaring international materials costs, up 42.8 percent from the previous year.

While the index for the value of exported goods in November rose 27.1 percent on-year to a new high of 140.66. This was supported by brisk exports of chips, petrochemicals and other key products.