Korean business sentiment has weakened again, with manufacturing confidence falling sharply despite continued strength in semiconductor exports.
The Bank of Korea said the manufacturing business sentiment index dropped 4.3 points in September to 99.5, the largest monthly decline in four years. A reading below 100 means pessimistic responses outweigh optimistic ones. The index had stayed above 100 for four straight months before turning down.
Production concerns are weighing on the outlook
The central bank linked the deterioration partly to production disruption concerns from labor disputes in autos, shipbuilding and steel, as well as fewer working days around the Chuseok holiday. Some auto suppliers reported delivery disruptions and rising inventories during partial strikes.
A separate Korea Enterprises Federation survey also pointed to a softer October outlook, with its business survey index falling to 98.6 from 102.0. Manufacturing and export expectations weakened, while nonmanufacturing and domestic-demand outlooks remained more resilient.
Together, the surveys suggest the economy's export strength is not translating evenly into corporate confidence. Conditions in manufacturing will depend on whether production normalizes and whether export momentum can offset weaker profitability, investment and financing expectations.