Business Sentiment Declines in September Amid Rising Costs

In September, South Korea's business sentiment decreased from a nearly four-year high in August, primarily driven by rising costs. The Composite Business Sentiment Index (CBSI) dropped to 99.1, down 0.5 points from August's reading of 99.6.

The Bank of Korea (BOK) reported that the CBSI reached its highest level since September 2022 in August, when it peaked at 102. A reading below 100 indicates that pessimistic views among businesses outnumber optimistic ones.

While the non-manufacturing sector, which includes industries like transportation and leisure, saw an improvement in sentiment, the manufacturing sector experienced a decline. The CBSI for manufacturers fell to 99.5 from 103.8, while the index for non-manufacturing firms rose to 98.9 from 96.7.

Looking ahead, the outlook for October remains stable at 99.6, unchanged from the previous month, suggesting that businesses are cautious about future economic conditions amid ongoing inflation concerns.