Manufacturing Business Sentiment Recovers for Second Straight Quarter... Q4 BSI Rebounds to ‘86’

Five Key Sectors Including Semiconductors and Cosmetics Show Strong Performance
60% of Manufacturers Say "Operating Profit Targets Won't Be Met"

With both export and domestic companies seeing improved business outlooks, the manufacturing business sentiment index has shown a recovery trend for two consecutive quarters. This improvement is mainly attributed to growing expectations for key sectors such as semiconductors and cosmetics. However, due to increased production costs stemming from high inflation and high interest rates, 6 out of 10 manufacturing companies forecast that they will find it difficult to achieve the operating profit targets set at the beginning of this year.

According to the 'Manufacturing Business Survey Index (BSI) for the 4th Quarter of 2026,' released on September 27 by the Korea Chamber of Commerce and Industry based on a survey of 2,413 manufacturing companies nationwide, the BSI for the fourth quarter was tallied at 86, up 6 points from the previous quarter's 80.

2026 Q4 Manufacturing Business Survey Index (BSI). Korea Chamber of Commerce and Industry

The BSI is an index measuring business sentiment and outlook among corporate executives. A value above 100 means more companies have a positive outlook for the next quarter, while a value below 100 indicates the opposite. In this survey, the BSI for export-oriented companies rose by 5 points quarter-on-quarter to 91. The BSI for domestic-oriented companies increased by 7 points to 85, supported by the stabilization of the exchange rate and reduced burden of import raw material costs—marking the first simultaneous rise in five quarters since the third quarter of last year.

By sector, the number of industries expecting improved business conditions in the next quarter increased significantly to five. Sectors exceeding the benchmark of 100 were as follows: semiconductors (139), cosmetics (120), medical and precision instruments (108), shipbuilding (103), and pharmaceuticals and biotech (102). In particular, the BSI for semiconductors hit a record high and exceeded 100 for four consecutive quarters. Shipbuilding benefited from increased orders for high-value-added vessels, and the pharmaceuticals and biotech sector was buoyed by rising exports of biosimilars, resulting in a predominantly positive outlook. Non-metallic minerals (88) rebounded by 27 points, supported by entering the peak autumn season and stabilized raw material prices. However, electronics and telecommunications (80) fell by 13 points quarter-on-quarter due to the rising costs of key raw materials such as memory chips and copper, as well as increased logistics expenses.

Despite the recovery trend in sentiment indexes, actual business profitability outlooks remain grim. Among the surveyed manufacturers, 60.4% responded that their operating profit for this year would fall short of their original annual targets. The most frequently cited obstacle to meeting these goals was the rise in production costs, including raw materials and energy (43.2%), followed by worsening sales and order conditions (24.9%), increased labor costs and difficulties securing personnel (11.7%), and exchange rate volatility (6.8%).

Kang Minjae, head of economic policy at the Korea Chamber of Commerce and Industry, stated, "While some core sectors are driving improvements in business sentiment, concerns remain high over companies falling short of their operating profit targets." He added, "Prompt and practical policy support is urgently needed to improve the business environment, including stabilizing the supply of raw materials and alleviating the burden of energy costs."

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