Corporate sentiment hits highest level in 4 years, 2 months: "Semiconductor-led gains spread to downstream industries, too"

Temporary negative factors, including the Chuseok holiday and auto strike, eased
Higher production and investment in semiconductors and other industries also benefited downstream sectors

Corporate sentiment this month reached its highest level in four years and two months. Not only large companies and exporters but also small and medium-sized enterprises (SMEs) and companies focused on the domestic market were above the long-term average of 100. This was the result of the easing of negative factors that had temporarily weighed on sentiment last month, including the Chuseok holiday and the impact of an auto industry strike, as well as increased production and investment in key industries such as semiconductors, automobiles, and shipbuilding, which also benefited upstream industries.

According to the "October 2026 Business Survey and Economic Sentiment Index (ESI)" released by the Bank of Korea on the 29th, the all-industry Corporate Business Sentiment Index (CBSI) rose 5.1 points from the previous month to 104.2. This was its highest level in four years and two months, since August 2022 (105.5).

The CBSI is an indicator of corporate sentiment calculated using key indices from the Business Survey Index (BSI) to assess businesses' overall perceptions of the economy. With the long-term average (January 2003 to December 2025) set at 100, a reading above 100 indicates that businesses' expectations for economic conditions are more optimistic than the long-term average, while a reading below 100 indicates pessimism. The all-industry CBSI had not exceeded 100 since September 2022, four years and one month ago.

Not only large manufacturing companies (105.1) but also SMEs (105.6) saw a sharp increase of 11.2 points from the previous month, returning to optimistic territory. By business type, domestic-focused companies also turned optimistic, with a reading of 103.8, following exporters at 106.1.

In detail, the October CBSI for manufacturing rose 6.1 points to 105.6, its highest level since June 2022 (107.1). The increase was the largest since April 2021 (10.3 points). Manufacturing performance improved, led by automobiles, other machinery and equipment, and chemicals and chemical products. In the auto industry, the easing of temporary factors, including the Chuseok holiday and the impact of a strike at an automaker in August, led to a return to normal operations at parts suppliers and increased exports. In other machinery and equipment, product inventories fell as deliveries to downstream industries such as semiconductors, shipbuilding, and automobiles increased. In chemicals and chemical products, orders from downstream industries, including the secondary battery industry, increased.

The October CBSI for non-manufacturing rose 4.3 points from the previous month to 103.2. Performance improved, led by wholesale and retail trade, construction, information and communications, and transportation and warehousing. Park Yong-min, head of the Economic Sentiment Survey Team at the Bank of Korea's Economic Statistics Department 1, explained, "Wholesale trade benefited from increased automobile exports (by general trading companies) and B2B (business-to-business) activity, including semiconductor factory equipment and materials. Retail trade was supported by an increase in foreign tourist visits during the National Day holidays in China and Taiwan, as well as greater demand for medicines during the change of seasons." Construction benefited from more orders related to semiconductor factories and data center construction, as well as secured contracts for residential building projects, mainly in the Seoul metropolitan area. Information and communications benefited from an increase in platform payment transactions and lower telecommunications equipment costs due to the decline in the exchange rate. Transportation and warehousing were supported by increased cargo volumes and higher ocean freight rates.

The November business sentiment outlook index rose 1.9 points from the previous month to 103.0 for manufacturing and 2.4 points to 101.0 for non-manufacturing.

The ESI, calculated by combining the BSI and the Consumer Sentiment Index (CSI), stood at 100.8 this month, up 0.9 points from the previous month. The cyclical variation, which excludes seasonal factors and other influences, was 100.1, up 1.0 point from the previous month.

The survey was conducted from the 14th to the 21st among 3,639 corporations nationwide. A total of 3,450 companies responded (94.8%): 1,941 in manufacturing and 1,509 in non-manufacturing. To strengthen the representativeness of the index's population and reflect economic conditions amid changes in the industrial structure, including shifts in the distribution of sales and the establishment and closure of businesses, the Bank of Korea conducted its regular sample revision and applied it starting this month.

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