Business sentiment in South Korea saw a slight decline in January, despite robust exports, primarily due to a drop in sentiment in the non-manufacturing sector following the dissipation of year-end base effects. The Composite Business Sentiment Index (CBSI) for all industries stood at 94 this month, a decrease of 0.2 points from December, as reported by the Bank of Korea (BOK).
The index had shown a positive trend for two consecutive months, reaching 94.2 in December, its highest level since July 2024, before experiencing a slight setback in January. Notably, the sentiment among nonmanufacturers decreased by 2.1 points to 91.7, while that among manufacturers increased by 2.8 points to 97.5.
A reading below 100 on the index indicates that pessimists outnumber optimists. An official from the BOK mentioned that while sentiment among manufacturers improved due to increased exports, sentiment among nonmanufacturers deteriorated as year-end seasonal factors faded. Factors like Black Friday promotions and a rise in Chinese tourists during the winter holiday season had previously boosted retail sales and nonmanufacturing activity in December.
