South Korea’s business sentiment for November fell from a month earlier due to growing global double-dip recession concerns, a poll showed Sunday.
The monthly business survey index for the upcoming month came in at 96.4, down five points from the 101.4 forecast for October, according to the survey by the Federation of Korean Industries, the lobbying group of the country’s large businesses.
The figure marks the second lowest BSI number this year after the 96.3 reading tallied for September, and the third time that the monthly index falls below the break-even 100 mark in the second half.
A BSI reading below 100 means pessimists outnumber optimists.
The poll surveyed the country’s 600 largest businesses in terms of sales.
The FKI attributed the weak numbers to persistent challenges facing the U.S. and eurozone economies, and concerns that China may experience a hard landing. It also said that such worries were exerting negative influence on corporate balance sheets and financing, and could make local companies more vulnerable to foreign exchange volatility.
The sovereign credit ratings of Italy and Spain were downgraded with some experts predicting France may be at risk as well.
In addition, the Chinese economy grew 9.1 percent in the third quarter, the lowest in two years, and shy of the 9.3 percent growth predicted by market watchers. The country’s inflation also rose in the 6 percent range, which can make it hard for Beijing to implement emergency economic stimulus measures if the need arises.
By sector, the BSI for the service field stood at 96.7 with the index for manufacturing hitting 96.3.
The survey showed BSI readings for petroleum and chemicals standing at 64.4, and broadcasting and telecommunications reaching 80.0.
The index numbers for hiring, financing and investment all fell below the 100 mark, reflecting the gloomy outlook companies have in regards to business prospects for next month.
The FKI, however, said the indices for exports and domestic sales reached 101.4 and 103.9, respectively, as local companies expect more consumption and headways in foreign markets.
