"Holiday Season Recovery Extends to Non-Manufacturing: Business Sentiment Hits Four-Year High"

Bank of Korea "August Business Survey Results and Economic Sentiment Index (ESI)"
Composite Business Sentiment Index for all industries rises to 99.6, highest in 3 years and 11 months
Exporting manufacturers reach 108.5 — highest since May 2022
Non-manufacturing sector sees sharp rise driven by increased transportation and leisure demand during holiday season

This month, corporate business sentiment reached its highest level in three years and eleven months. Notably, this improvement, which had previously been driven mainly by large exporting companies in the manufacturing sector, has now extended to small and medium-sized manufacturers and the non-manufacturing sector, nearing the long-term average.

According to the "August 2026 Business Survey Results and Economic Sentiment Index (ESI)" released by the Bank of Korea on August 26, the Composite Business Sentiment Index (CBSI) for all industries rose by 1.1 points month-on-month to 99.6. Thanks to improved performance in service industries such as transportation and warehousing as well as information and communication, this is the highest level recorded in three years and eleven months since September 2022 (102.0).

The CBSI is a business sentiment indicator calculated using key indices from the Business Survey Index (BSI) to comprehensively assess corporate perceptions of the overall economy. The long-term average (from January 2003 to December 2025) is set at 100. If the value exceeds 100, it indicates that companies are more optimistic about economic conditions than the long-term average, while a value below 100 is interpreted as pessimism.

With improvements seen in both the manufacturing and non-manufacturing CBSI, the index for small and medium-sized manufacturers jumped 2.2 points from the previous month to 99.8. Among manufacturers, exporters recorded a 1.0-point increase to 108.5, the highest since May 2022 (114.0). The non-manufacturing sector also saw a 1.5-point rise to 96.7. However, large manufacturing companies, which had been leading the improvement trend, saw their index drop by 1.6 points to 103.7. Park Yongmin, Head of the Economic Sentiment Survey Team at the Economic Statistics Department 1 of the Bank of Korea, commented, "Semiconductors, which have driven corporate sentiment, performed well," and added, "The non-manufacturing sector showed a greater rise, thanks to increased transportation and leisure demand during the holiday season and the recovery of broadcasting and film services." He also noted, "This month's decline in business sentiment among large companies is believed to result from temporarily sluggish production due to the holiday season."

The manufacturing CBSI for August rose by 0.6 points from the previous month to 103.8. Manufacturing performance improved mainly in electronic, video, and telecommunication equipment, food products, and chemicals and related products. Electronic, video, and telecommunication equipment was affected by increases in printed circuit board prices and the use of inventory stockpiled due to reduced operation rates during the holiday season. Food products benefited from decreased prices of imported ingredients due to a lower exchange rate, as well as increased sales prices for processed meat products and others. For chemicals and related products, both increased orders from downstream industries such as interior materials and supply difficulties for raw materials caused by the Middle East war contributed to the improvement.

The CBSI for the non-manufacturing sector rose by 1.5 points to 96.7. Performance in non-manufacturing during August improved in transport and warehousing, information and communication, and in professional, science, and technical services. For transportation and warehousing, higher shipping rates and increased demand for freight and passenger transport during the holiday season were key factors. The information and communication sector saw performance improvement mainly among companies in video, broadcasting, and IT services. In professional, science, and technical services, increased orders at architecture, design, and semiconductor engineering firms drove overall results.

The outlook for the Business Sentiment Index for next month was surveyed at 99.6, up 3.1 points from the previous month. Manufacturing is expected to rise by 2.0 points to 102.5, while non-manufacturing is anticipated to increase by 3.9 points to 97.6. The outlook for manufacturing in September improved mainly for electronic, video, and telecommunication equipment, food products, and chemicals and related products. The non-manufacturing outlookrose mainly in wholesale and retail, transport and warehousing, as well as arts, sports, and leisure.

The ESI (Economic Sentiment Index), which combines the BSI and the Consumer Survey Index (CSI), rose by 1.5 points from the previous month to 99.4. The cyclical component, which removes seasonal factors, recorded 96.9, up 0.4 points month-on-month.

Meanwhile, this survey was conducted from August 10 to 18, targeting 3,524 incorporated companies nationwide. A total of 3,170 companies responded, consisting of 1,770 manufacturing companies and 1,400 non-manufacturing companies, for a response rate of 90.0%.

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