In addition to sluggish domestic demand, the Trump risk is also a factor... Corporate sentiment index falls = South Korean report

The sluggish domestic demand, economic uncertainty and sluggish exports are having a negative impact on business sentiment. In particular, the possibility of a worsening of terms of trade following the reelection of President-elect Trump is having a negative impact on business sentiment.
According to the November Corporate Economic Survey released by the Bank of Korea on the 27th, the all-industry Business Sentiment Index (CBSI) was 91.5, down 0.6 points from the previous month.
In October, it turned upward for the first time in four months since June, but it turned downward again in just one month. The CBSI is calculated based on the main indicators of five manufacturing companies and four non-manufacturing companies, such as business conditions and financial conditions.
It is a sentiment index created by the company. The long-term average value (from January 2003 to December 2023) is set at 100, and a value greater than 100 indicates more optimistic sentiment than the long-term average, while a value less than 100 indicates more negative sentiment.
The survey was conducted by the Bank of Korea from the 12th to the 19th of this month, targeting 3,524 corporations (3,326 companies responded) across the nation.
The CBSI for the manufacturing industry has been below 100 for two years since October 2022. This month's CBSI for the manufacturing industry was 90.6, down 2.0 points from the previous month.
The decline was mainly due to the deterioration of electronic, video and communication equipment, automobiles, and chemicals and chemical products. Exports, especially those from the mobile phone parts manufacturing industry, decreased.
The company was also affected by strikes by some auto parts suppliers. Domestic and overseas demand is declining, and competition with Chinese manufacturers is intensifying.
The CBSI for non-manufacturing industries rose 0.4 points from the previous month to 92.1.
The main factors behind the increase were improvements in the performance of business facility management, business support and rental services, electricity, gas and steam, etc. New contracts increased, mainly in business facility management and temporary staffing services.
The CBSI outlook for next month for all industries was 89.7, down 0.1 percentage point. The manufacturing industry was down 1.6 percentage points from the previous month.
The index for the non-manufacturing sector is expected to be 88.9, down 1.1 percentage points from the previous month at 90.3. Hwang Hee-jin, head of the statistics research team at the Bank of Korea’s Economic Statistics Department, said, “The Trump administration’s organizational structure is
"We have been monitoring the changes and the rise in the exchange rate, but we do not believe that it will have a significant impact on the overall economy," he said. "However, we are concerned that the impact will be felt by companies in the automotive and green energy industries, as well as the semiconductor industry."
"Some companies expected that they would be slightly negatively affected if policies to reduce or eliminate incentive support were implemented," he explained.
"However, it reflects anxiety caused by uncertainty," he added. Meanwhile, the Economic Sentiment Index (ESI), which combines the Consumer Sentiment Index (CCSI) and the Business Sentiment Index (BSI), was at 9
The cyclical fluctuation value of the Economic Sentiment Index was 93.8, up 0.1 point from the previous month.