S. Korea's manufacturing sentiment hits 10-year low

SEOUL, Nov. 26 (Yonhap) -- South Korea's manufacturing confidence for the first
quarter of 2009 fell to a 10-year low as a slump in domestic demand and exports
is expected to deepen, a poll showed Wednesday.

The Korea Chamber of Commerce and Industries said its business survey index (BSI)
dropped to 55 for the January-March period from 79 for the fourth quarter of this
year. The index is at its lowest since the fourth quarter of 1998, when it stood
at 61 following the nation's economic crisis.
The survey was taken of 1,334 manufacturers. A reading below 100 indicates
pessimists outnumber optimists.
The BSI for exports, the biggest growth engine for Asia's fourth-largest economy,
fell to 80 for the first three months next year, compared with 99 three months
earlier, the survey showed.
Domestic consumption is also expected to decline sharply with the figure coming
to 66 from 91 in the cited period, according to the poll.
A majority 39.1 percent of the manufacturers surveyed cited soaring raw material
costs as the biggest concern for their business activities, followed by a
weakening won referred to by 24.3 percent.
The gloomy outlook came as South Korea's growth rate is forecast to fell steeply
in the wake of the global credit crunch sparked by the U.S. mortgage loan crisis.
Finance Minister Kang Man-soo foresaw last week the economy may grow in the mid
to upper range of 2 percent, failing to reach previously predicted 4 percent
range.
Damping outbound shipments and domestic spending cut slowed the economic growth
to 0.6 percent in the July-September period vis-a-vis three months earlier, the
slowest growth in four years.
In early November, the Bank of Korea lowered the policy rate to 4 percent,
slashing a combined 1.25 percentage point in a month to prevent a sharp economic
slowdown.
pbr@yna.co.kr
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