Manufacturing Business Sentiment Rebounds After Three Months... Domestic and Export Markets Expected to Improve Together in September

Export PSI Remains Strong at 112 for Fourth Consecutive Month, While Domestic Market Weakens at 98
September Business Outlook Rises to 108, With Expectations of Simultaneous Improvement in Domestic and Export Markets
Semiconductors Maintain Strong Performance at 150

As business sentiment among domestic manufacturers improved, the Prospects Survey Index (PSI) for August exceeded the baseline of 100 for the first time in three months. While exports remained robust, there were forecasts that the domestic market could also improve in September.

According to the 'Industrial Business Sentiment Expert Survey' released by the Korea Institute for Industrial Economics & Trade on August 23, the manufacturing PSI for August stood at 107, up 12 points from the previous month's 95. This marks the first time in three months that the manufacturing PSI has surpassed the baseline of 100.

The PSI is an indicator calculated based on evaluations by leading experts in major domestic industries, surveying their assessments of current business conditions and their outlook for the following month. A reading closer to 200 indicates a majority view that business has improved compared to the prior month, while a figure closer to 0 suggests deterioration. This survey was conducted from the 10th to the 14th of August, with 126 experts responding about 170 sectors.

In August, trends in the domestic market and exports diverged. The Domestic Market Sales PSI came in at 98, slightly below the baseline, while exports scored 112, surpassing 100 for a fourth consecutive month. The production level also stood at 109, above the baseline. Investment amount registered 108, maintaining a level above 100 for four consecutive months. However, profitability was only 94, remaining below the baseline for a second month despite increased product prices.

Expectations rose for simultaneous improvement in both domestic and export sectors in the coming month. The September manufacturing business outlook PSI reached 108, up 13 points from the previous month's forecast of 95 and exceeding the baseline for the first time in two months. The domestic market outlook rose by 10 points to 105, exports increased by 7 points to 118, production level climbed 12 points to 115, and profitability was projected to return above the baseline at 104.

By industry type, the ICT sector stood out with significant strength. The August ICT business PSI scored 122, up 20 points from the previous month. Conversely, the machinery sector recorded 97, dropping below the baseline for the first time in four months, and the materials sector reported 95, staying below 100 for the third consecutive month. However, the materials sector did increase by 19 points from the prior month.

Looking ahead to September, overall improvements across sectors are expected to be more pronounced. The forecasted PSI for the ICT sector is 116, anticipated to stay above the baseline for a 16th consecutive month, with the machinery sector projected to recover to 102. The materials sector is also expected to return to baseline at 100.

By detailed industries, the semiconductor PSI remained high at 144 in August, followed by mobile phones at 143, bio-health at 124, displays at 108, textiles at 107, and machinery at 106. In particular, mobile phones soared by 87 points compared to the previous month. In contrast, home appliances dropped 14 points to 57, while steel registered 78, automobiles 89, and chemicals 94, all below the baseline.

For the September outlook, semiconductors are expected to record the highest PSI at 150, followed by bio-health at 124, home appliances at 114, machinery at 106, and textiles at 107, all above the baseline. Notably, home appliances are forecast to surge 43 points, from a previous forecast of 71 to 114, indicating a significant rebound. Steel is also projected to rise from 67 to 100, mobile phones from 75 to 100, and automobiles from 83 to 100. However, displays and chemicals are forecast to remain below the baseline at 92 and 94, respectively.

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