[KITA News] Increase in Semiconductor Investment Results in Rebound of Economic Sentiments

                                               

Increase in Semiconductor Investment Results in Rebound of Economic Sentiments

Increase in Semiconductor Investment

Results in Rebound of Economic Sentiments

Regarding Manufacturing Industry in Four Months

 

Increase in Semiconductor Investment

Results in Rebound of Economic Sentiments

Regarding Manufacturing Industry in Four Months

 

 

Despite the worsening of the semiconductor economy, consistent facility investment has been made, resulting in a rebound in economic sentiments regarding the manufacturing industry in four months. At the same time, economic sentiments for industries overall also rose in seven months. According to the survey results of the March Business Sentiment Index (BSI) announced by the Bank of Korea on March 30, the BSI for the current situation of this month’s manufacturing industry recorded 70, which was 7 points higher than the previous month.

 

The BSI for the current situation of the manufacturing industry dropped 3 consecutive months in a row from December of last year. In February (63), it dropped to the lowest level in two years and seven months, since July 2020 (59). BSI is a statistical index that is calculated based on businessmen’s judgment of and outlook on the current business situation. If there are more negative answers than positive, the index goes below 100. The reason that March economic sentiments for the manufacturing industry grew drastically was because the industry situation was improved for electronics/video/telecommunications equipment (9 points); primary metals (15 points); and other machinery and equipment (13 points).

 

Electronics/video/telecommunications equipment and other machinery equipment were impacted by the increase in the delivery of manufacturing equipment as a result of an increase in demand for semiconductor facility investment. In the case of primary metals, along with the rise in prices of steel products such as hot rolled steel plates, the rise in demand for downstream industries such as shipbuilding and automobiles contributed in a substantial increase in the index.

 

“Amidst expectations that semiconductor prices shall improve in the second half of the year, companies such as Samsung Electronics [005930] and SK Hynix [000660] continue to conduct facility investment without reducing production,” said Hwang Hee-Jin, Director of the Statistics Survey Team of the Bank of Korea’s Economic Statistics Department. “This has resulted in expectations for satisfactory performance by suppliers of manufacturing equipment.”

 

The BSI for the industry situation of the manufacturing industry all rose, including large companies (7 points), SMEs (6 points), export companies (3 points), and domestic companies (9 points).

 

The BSI for the industry situation of the non-manufacturing industry in March (74) rose 1 point from the previous month. This was a trend of increase for two months in a row since last month. Among the non-manufacturing industries, the extent of increase in the BSI for the construction industry (8 points) and real estate industry (6 points) was substantial, due to an increase in the execution of construction engineering and a rise in new orders for civil engineering due to seasonal factors. With an increase in demand for leisure activity, such as a rise in the number of visitors to golf courses for the spring season, the industry situation for the arts/sports/leisure related services industry (14 points) improved greatly.

 

The BSI for the industry situation of all industries, which encompasses manufacturing and non-manufacturing industries, was 72 in March, a rise of 3 points from February. The rise in the BSI for the industry situation of all industries was in seven months, since August of last year. The BSI for the industry situation for April (73) grew 2 points in one month. It rose 3 points in manufacturing (69), and 1 point in non-manufacturing (75).

 

The Economic Sentiment Index (ESI) for March which reflects the Consumer Sentiment Index (CSI) in the BSI dropped 0.1 points from the previous month to record 91.5. The cyclical fluctuation for ESI which eliminates seasonal factors was 89.8, which was a drop of 1.0 points from the previous month. This month’s survey was conducted for 3,255 corporations from the 15^th to the 22^nd of last month. Among them, 2,797 (1,665 manufacturing / 1,132 non-manufacturing) companies responded to the survey.

 

(Provided by Yonhap News)

By - KITA.Net (http://kita.org/about/newsView.do?id=&no=2774&searchWrd=&pageIndex=2)