Manufacturing Business Sentiment Remains Sluggish for Second Month... Only Exports Show Signs of Rebound

KIET April Expert Survey
Simultaneous Decline in Domestic Demand and Exports
May Outlook Remains Below Baseline... Only Exports Expected to Rebound Slightly

The business sentiment in the domestic manufacturing sector remained below the baseline for the second consecutive month, continuing its sluggish trend. As both domestic demand and exports contracted simultaneously, there was an overall weakness in production, investment, and profitability.

According to the "April 2026 Industrial Business Survey Results" released by the Korea Institute for Industrial Economics & Trade (KIET) on April 26, the Professional Survey Index (PSI) for manufacturing business conditions in April stood at 95. This figure has remained below the baseline (100) for two consecutive months and marks a slight decline from the previous month's PSI of 97.

The main cause has been identified as the simultaneous downturn in both domestic demand and exports. The domestic demand PSI dropped again below the baseline to 94, while the export PSI also fell to 92, dipping below the baseline for the first time in eight months. Consequently, the production level (94) also fell below the baseline for the first time in six months. Investment (93) and profitability (87) continued their weak performance, while the product price index (126) reached its highest level since May 2021.

However, there are signs of a partial rebound expected in May. The business outlook PSI for May is projected at 95—still below the baseline, but up by 7 points from the previous month. In particular, exports are expected to slightly exceed the baseline at 102, while domestic demand (96) is forecast to remain weak.

When analyzed by industry, the polarization of business sentiment was clear. As of April, semiconductors, mobile phones, shipbuilding, and steel all surpassed the baseline, while automobiles, chemicals, textiles, and bio-healthcare lagged behind. Notably, the decline was especially pronounced in automobiles and textiles compared to the previous month.

Looking ahead to May, some sectors such as semiconductors, steel, and home appliances are expected to perform above the baseline, but many sectors—including mobile phones, automobiles, machinery, and textiles—are forecast to continue underperforming.

By category, only the ICT sector maintained a relatively robust trend. The ICT business condition PSI in April was 116, exceeding the baseline, while both machinery and materials stood at 88, remaining below the baseline. The favorable trend in ICT (109) is expected to continue in May, but machinery (88) and materials (90) are projected to remain weak.

KIET explained, "With both domestic demand and exports weakening at the same time, business sentiment across the manufacturing sector has contracted. However, as there are signs of a partial rebound in exports, it will be important to monitor future trends closely."

This content was produced with the assistance of AI translation services.