Korea's manufacturing sentiment for December hits all-time low

SEOUL, Nov. 26 (Yonhap) -- South Korean manufacturers' confidence for December
declined to a record low as firms forecast that the global recession will hurt
export growth and already faltering domestic demand, the central bank said
Wednesday.

The business survey index (BSI) for manufacturers' expectations declined to 52
for December, compared with 65 the previous month, according to the Bank of Korea
(BOK). The index is the lowest since January 2003, when the central bank began to
compile related data on a monthly basis, it added.
A reading below 100 means pessimists outnumber optimists. The nationwide survey
of 2,929 companies was conducted from Nov. 13-20.
"Amid stagnant domestic demand, companies had a gloomy outlook as the global
recession will likely also hurt South Korea's exports," said Jang Young-jae, a
BOK official. Overseas shipments account for more than 50 percent of the Korean
economy.
The BSI for the export outlook came in at 77 for December, down from 93 the
previous month. The index marked the lowest level since the third quarter of
1996, when the BOK started to compile related data, it added.
The index for sales in the domestic market reached 69 for the next month,
recording the worst level since the fourth quarter of 1998.
The survey comes as the South Korean economy grew 0.6 percent in the third
quarter from three months earlier, the slowest growth in four years, due to
sluggish domestic demand and lagging export growth.
Recently, the government said South Korea is expected to post a trade deficit for
the second straight year in 2009, mainly due to declining exports.
Since October, the BOK has trimmed the rate by a combined 1.25 percentage point
to 4 percent in a bid to keep global financial turmoil from sharply slowing the
real economy.
sooyeon@yna.co.kr
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