SEOUL, December 30 (AJP) - South Korean companies reported improved business conditions for a second consecutive month in December, supported by year-end seasonal factors, the central bank said on Tuesday.
However, sentiment for the coming month weakened sharply in the nonmanufacturing sector as the seasonal boost is expected to fade.
According to the Bank of Korea’s December business survey and Economic Sentiment Index, the all-industry Corporate Business Sentiment Index (CBSI) rose 1.6 points from November to 93.7, extending gains recorded the previous month.
The CBSI, which combines key Business Survey Index components for manufacturing and nonmanufacturing, remains below its long-term average of 100, indicating continued overall pessimism despite the recent improvement.
Manufacturing sentiment improved, with the CBSI rising 1.7 points to 94.4, supported by better funding conditions and higher production. The nonmanufacturing index climbed 1.4 points to 93.2, driven by stronger sales and improved financing conditions.
The central bank said year-end seasonal effects provided a lift to nonmanufacturing activity, while manufacturing benefited from improved conditions in industries linked to U.S. capital spending.
Lee Hye-young, head of the Bank of Korea’s economic sentiment survey team, said sectors such as metal processing and machinery and equipment were positively affected by U.S. investment trends. She noted that these industries include a large number of small and medium-sized firms.
On currency movements, Lee said the weak won likely boosted profitability for manufacturing exporters, while companies with a high reliance on imports faced pressure on margins. The exchange rate had a more limited impact on nonmanufacturing overall, though some sectors, including wholesale, retail and trade-related industries, were affected, she added.
The all-industry CBSI outlook for next month fell 1.7 points to 89.4. Manufacturing expectations rose 1.9 points to 93.6, while nonmanufacturing sentiment dropped sharply by 4.1 points to 86.6, marking the largest monthly decline since January.
Lee said manufacturing expectations remained supported by industries that improved this month, while nonmanufacturing sentiment weakened as sectors that benefited from temporary year-end demand anticipated a slowdown in early 2026.
The Economic Sentiment Index fell 1.0 point to 93.1, while its cyclical component increased by 0.7 point, the central bank said.
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