June BSI at 98.6...Business Sentiment Rebounds on Semiconductor Optimism

Up 11.1 Points from Previous Month (87.5)

Export BSI Hits 101.1, Highest in Four Years and Three Months

It has been found that business sentiment, which had sharply declined due to the Middle East conflict, has now succeeded in rebounding.

According to the Korea Economic Association (hereinafter referred to as KEA) on May 27, a Business Survey Index (BSI) conducted on the 600 largest companies by sales showed that the BSI outlook for June 2026 recorded 98.6.

June Outlook Business Survey Index (BSI). Korea Economic Association

Previously, the BSI outlook remained in the 80s for two consecutive months following the Middle East crisis. However, this month it rebounded by 11.1 points from the previous month, approaching the baseline of 100. Generally, when the BSI exceeds the benchmark of 100, it indicates that more companies have a positive outlook on the economy. Conversely, if it is below 100, more companies have a negative assessment.

The economic outlook for June varied by industry. The manufacturing BSI reached 101.7, turning positive for the first time in three months since March (105.9). In contrast, the non-manufacturing BSI remained at 95.4, staying below the baseline of 100 for the sixth consecutive month.

Among the 10 detailed manufacturing sectors, four industries showed strong performance: electronics and communications equipment (including semiconductors) at 122.2, general and precision machinery and equipment at 115.0, wood, furniture, and paper at 114.3, and automobiles and other transportation equipment at 103.2. Three sectors—textiles, apparel and leather & footwear, pharmaceuticals, and metal & fabricated metal products—hovered around the baseline of 100, while the remaining three sectors showed a negative outlook.

Out of seven detailed non-manufacturing sectors, only wholesale & retail (109.8) and leisure, accommodation & food services (107.7) showed a positive outlook, while the other five sectors recorded a negative outlook.

KEA explained that despite external uncertainties such as the Middle East conflict, corporate sentiment in key manufacturing sectors like semiconductors is recovering rapidly. However, industries related to construction and energy continue to struggle due to ongoing supply chain instability.

By segment, exports (101.1) have turned positive, and it is expected that the recent trend of export expansion will continue into June. In particular, the export BSI reached its highest level in four years and three months since March 2022 (104.2).

However, aside from exports, other segments still remain below the baseline of 100, indicating that the improvement in business sentiment has not spread evenly across all areas. While the strength of the semiconductor sector is clearly reflected in exports, companies remain cautious about expanding investment and hiring, citing continued concerns over funding instability and deteriorating profitability amid economic uncertainty.

Lee Sangho, Head of the Economic Division at KEA, stated, "While the strong performance of leading advanced industries such as semiconductors is showing signs of improving business sentiment, recent labor-management conflicts over corporate profits have emerged as a significant management risk. To ensure that our companies remain competitive in the fiercely contested global market, it is essential to foster a cooperative labor-management culture based on mutual trust and understanding between labor and management."

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