South Korean manufacturers expect fourth-quarter weakness, survey shows

South Korean manufacturers expect business conditions to remain weak in the fourth quarter, according to a survey released on October 18 by the Korea Institute for Industrial Economics and Trade. The conditions outlook index stood at 97, unchanged from the preceding quarter's outlook. The survey covered 1,500 manufacturers from September 7 to 18, Yonhap and Asia Economy reported. The index ranges from zero to 200, with readings below 100 indicating that more respondents expect deterioration than improvement compared with the previous quarter. [ 1 , 2 , 3 , 4 ]

The fourth-quarter sales outlook index slipped to 97 from the previous quarter's forecast of 99. Export expectations fell from 101 to 100, while the facilities investment outlook declined from 100 to 99. The inventory and ordinary-profit outlook indices each rose one point, to 99 and 95 respectively. Expectations differed by company size: the sales outlook was 104 among large manufacturers and 95 among smaller firms. Wireless communications equipment and displays were the only listed industries with sales outlook readings above 100, at 103 and 102. Semiconductors and chemicals were each at 99, while steel stood at 91 and textiles at 89. [ 2 , 3 ]

In a question allowing multiple responses, 53% of manufacturers identified increased raw-material cost burdens as a negative influence on business activity. Weak domestic demand and accumulating inventories were cited by 38%, followed by continuing external uncertainty at 36%. The outlook followed deterioration in reported third-quarter sales conditions: the sales assessment index fell six points to 87 from 93. The third-quarter conditions assessment was 89, compared with 90 previously, according to Newsis and Chosun Ilbo. Domestic demand and exports were also below 100, at 88 and 92 respectively. [ 1 , 2 , 3 , 4 ]