South Korean manufacturers’ business confidence for February inched up on the back of easing eurozone fears but still remained close to a more than 2-year low amid lingering uncertainties, the central bank said Friday.
The index of manufacturers’ outlook on business conditions reached 81 for February, up from 79 for January, according to a monthly survey by the Bank of Korea. The index measures manufacturers’ expectations for the coming month.
The figure marks a recovery from January when it hit its lowest level since July 2009, when the comparable figure was 78.
A reading below the benchmark 100 means pessimists outnumber optimists. The index is based on a nationwide survey of 2,774 companies, which was conducted from Jan. 12 through 19.
“The figure gained slightly alongside easing fears on the impact of global uncertainties,” said Lee Seong-ho, an official at the BOK.
Seasonal considerations were also factored in as many Asian countries, including South Korea and China, celebrated the Lunar New Year’s holiday in January, Lee said.
Local manufacturers cited economic uncertainty and sluggish domestic demand as their biggest areas of concern, reflecting how South Korea’s high dependence on exports is eroding business confidence amid nagging global risks.
A separate survey that gauges local exporters’ business confidence showed a majority of South Korean companies expect their exports to decline in the first quarter of this year.
The BOK survey comes amid worries the local economy, Asia’s fourth-largest, will face increased downside risks this year. Earlier this month, BOK Gov. Kim Choong-soo said downside risks to growth in the global economy are increasing and domestic economic growth will remain subdued for some time due largely to the impact of external risks.
Citing concerns over a slowdown in exports, the central bank in December lowered its 2012 growth outlook for the South Korean economy to 3.7 percent from an earlier estimate of 4.6 percent.
