S. Korean manufacturing sentiment edges up for March

SEOUL, Feb. 26 (Yonhap) -- South Korea's manufacturing confidence inched up for
March due mainly to seasonal factors, but it remains extremely low amid a
tumbling economy, the central bank said Thursday.
According to the Bank of Korea, the business survey index (BSI) of manufacturers'
expectations rose to 50 for March from 49 for February, marking the second
straight month of rise after January's record low of 44.
The index measures manufacturers' outlook on business conditions in the next
month. A reading below 100 means pessimists outnumber optimists. The nationwide
survey of 2,929 companies was conducted from Feb. 13-20.
"A marginal rise in the index does not take on significance. The index inched up
because in March factory operations usually rise and the number of working days
increases from February," said Chang Young-jae, a BOK official. "Still, the
outlook for exports, the mainstay of the country's economic growth, remains
bleak."
The BSI for exports came in at 59 in March, down from 60 in February as exports
are expected to be dented further amid the deepening global slump. The figure
marks the lowest level since the third quarter of 1996, when the BOK began to
compile related data, it added.
Meanwhile, the BSI for manufacturers' current business sentiment fell to 43 in
February, compared with 47 the previous month and the lowest since the first
quarter of 1998.
The survey comes as the South Korean economy shrank 5.6 percent last quarter from
three months earlier, the sharpest fall in 11 years, due to tumbling exports and
weakening domestic demand.
Asia's fourth-largest economy is widely expected to post negative growth this
year, the first annual contraction since the 1997-98 Asian financial crisis.
On Feb. 12, the BOK cut the rate by 0.5 percentage point to a record low of 2
percent and hinted at further rate cuts down the road. Since October, the bank
has trimmed the rate by a combined 3.25 percentage points.
sooyeon@yna.co.kr
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