"Holiday Boost and Increased Outdoor Activities" Push Non-Manufacturing Business Sentiment to Three-Year High

Comprehensive Business Sentiment Index at 99.1, Down 0.5 Points

Manufacturing Declines Due to Fewer Working Days and Strikes

Non-Manufacturing Reaches Highest Level Since September 2023 (99.6),

Boosted by Holiday Season and Increased

This month, the non-manufacturing business sentiment index has reached its highest level in three years. While the improvement had previously been led by manufacturing industries such as large export companies, the momentum has slowed due to a reduction in the number of working days, strikes, and the aftermath of the war in the Middle East. Nevertheless, non-manufacturing sectors continue to rise, driven by the holiday season and an increase in outdoor activities.

According to the "September 2026 Business Survey Results and Economic Sentiment Index (ESI)" released by the Bank of Korea on the 29th, the Composite Business Sentiment Index (CBSI) for all industries this month stood at 99.1, down 0.5 points from the previous month. Although the index declined for the first time in three months, the scale of the decrease was not significant.

The CBSI is a corporate business sentiment indicator, calculated based on major indices in the Business Survey Index (BSI) to comprehensively assess companies’ perceptions of the overall economy. The index uses the long-term average (from January 2003 to December 2025) as a baseline of 100. A reading above 100 is interpreted as companies having more optimistic expectations about economic conditions than the long-term average, while a figure below 100 indicates a more pessimistic perspective.

In September, the CBSI for non-manufacturing rose 2.2 points to 98.9, marking the highest level since September 2023 (99.6). This continuing upward trend is attributed to the special demand during the holiday season and increased outdoor activities. For September, non-manufacturing performance improved compared to the previous month, especially in wholesale and retail, arts, sports and leisure, as well as professional, scientific, and technical sectors. The wholesale and retail sector saw increased demand for food, beverages, and pharmaceuticals due to the Chuseok holiday as well as seasonal changes. The arts, sports, and leisure segment benefited from a rise in visitors to stadiums and theme parks, thanks to the holidays and cooler weather. The professional, scientific, and technical sector was bolstered by an increase in orders for construction, architectural design, and semiconductor-related engineering firms.

In contrast, manufacturing declined due to a reduction in the number of working days, strikes, and the aftermath of the war in the Middle East. In September, the CBSI for manufacturing fell by 4.3 points from the previous month to 99.5. The decline in manufacturing performance was driven by the automotive, chemical substances and products, and electronic, visual, and communication equipment sectors. The automotive industry was affected by sluggish exports and domestic demand, the impact of strikes, and reduced operational rates during the holiday period. Park Yongmin, head of the Economic Sentiment Survey Team at the Bank of Korea’s Economic Statistics Department 1, commented, “There were partial strikes at finished car companies from late August to early September, and as a result, some small and medium-sized parts suppliers reported delivery disruptions.” He also explained that the impact was felt in rubber, plastics, other sectors, and related downstream industries. The chemicals sector was influenced by transport disruptions due to tensions in the Middle East, restructuring in the petrochemical industry, and rising raw material prices. The electronic, visual, and communication equipment sector experienced decreases in orders and sales for display, camera, and television manufacturers.

Containers waiting for export and import are piling up at Singamman and Gamman docks in Busan Port. Photo by Yonhap News Agency

Looking ahead to next month, the business sentiment index is expected to remain unchanged from the previous month at 99.6. Manufacturing is forecast at 101.1, down 1.4 points from the previous month, while non-manufacturing is projected to rise by 1.0 point to 98.6. The October outlook for manufacturing declined, particularly in chemicals, primary metals, and electrical equipment. Park noted, “However, the extent of the expected decrease in October (-1.4 points) is smaller than the actual decrease recorded in September (-4.3 points), and the slump in the automotive and electronic, visual, and communication equipment sectors has also narrowed considerably.” As for non-manufacturing, the outlook improved chiefly in wholesale and retail, construction, and real estate sectors.

The Economic Sentiment Index (ESI), which combines the BSI and the Consumer Survey Index (CSI), rose by 0.5 points from the previous month to 99.9, buoyed by improved consumer sentiment. The cyclical variation, excluding seasonal factors, increased by 0.7 points from the previous month to 98.3.

This survey was conducted from the 10th to the 17th of this month, covering 3,524 incorporated companies nationwide. Out of these, 1,760 were in manufacturing and 1,403 in non-manufacturing, for a total of 3,163 responses—an 89.8% response rate.

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