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Manufacturers' confidence for June dips to 4-month low

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(Globalpost/GlobalPost)

By Lee Minji

SEOUL, May 30 (Yonhap) -- Business sentiment among South Korean manufacturers for June slipped to the lowest level in four months, central bank data showed Friday, highlighting concerns on weakening consumer spending and the already upbeat won.

The index, which measures manufacturers' outlook on business conditions for the coming month, reached 81 for June, compared with 86 for May, according to a monthly survey by the Bank of Korea (BOK).

The June data marks the lowest level since the outlook for February reached 81, the survey showed.

A reading below the benchmark 100 means there are more pessimists than optimists. The index has been below 100 since July 2010 when it hit the benchmark level.

The outlook for June is based on a nationwide survey of 2,530 companies conducted between May 16 and May 23.

A BOK official explained that the survey fully reflects the impact of the Sewol ferry accident whereas the survey conducted in April failed to do so since it was conducted right after the accident.

The survey showed that the index measuring manufacturers' assessment of current business conditions came in at 79 in May, falling from 82 the previous month.

The business sentiment index among exporters for the coming month came in at 80, down from 83 in the previous month. The corresponding figure for domestic-focused firms reached 81, down from 86, according to the data.

While the percentage of companies citing "foreign exchange rate" as a business difficulty rose, that of companies who cited "raw material price hike" slipped.

The won's sharp ascent against the U.S. dollar has been raising concerns that it may dampen the profitability of local exporters. In April, the local currency gained an average 6.9 percent against the greenback.

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