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South Korean business sentiment hits 7-year high

South Korean business sentiment hits 7-year high

Confidence at South Korean manufacturers rose to a seven-year high in October, the central bank said Thursday, the latest in a series of figures that highlight an improving economy.
The Bank of Korea's index of conditions in the manufacturing sector rose to 92 in October from 90 the previous month, the bank said in a release. Manufacturers forecast a reading of 93 for November.
The October result was the highest since 96 in the fourth quarter of 2002, according to BOK economist Son Won. The central bank began carrying out the survey on a monthly basis in January 2003.
Despite the higher number, a reading below 100 means that pessimists still outnumber optimists.
The consumer confidence figure for October, announced Tuesday, also came in at the highest in more than seven years.
South Korea's economy has recorded three straight quarters of growth since contracting 5.1 percent in the final three months of 2008 amid the worldwide economic slump that followed the financial meltdown.
Asia's fourth-largest economy grew 2.9 percent in the third quarter ended Sept. 30, the central bank announced Monday. It was the strongest performance for a three-month period since an expansion of 3.8 percent in the first quarter of 2002.
Besides the confidence figures, South Korea's unemployment rate fell in September to a nine-month low of 3.4 percent and the current account _ the country's broadest measure of trade _ is firmly back in surplus after a deficit last year for the first time since 1997.
Earnings at some of the country's big-name companies have been strong. Hyundai Motor Co. and affiliate Kia Motors Corp. both reported record quarterly net profit in the third quarter as sales rose.
LG Display Co. announced record quarterly sales and a 90 percent surge in net profit, while LG Electronics Inc. said it recorded all-time high quarterly sales for flat screen TVs and mobile phones.
Hynix Semiconductor Inc., meanwhile, recorded its first net profit in two years as prices for memory chips increased.
The potential impact of a strengthening South Korean won, however, has raised concerns.
The won has been volatile against the dollar since last year. It fell 25.7 percent against the greenback in 2008 and continued to slide early this year, hitting 11-year lows in March. Since then, however, the won has surged about 33 percent.
South Korean exporters worry about a stronger currency as it can make their products less competitive in overseas markets and reduce the value of profits earned abroad when converted back into won.


Updated : 2021-01-26 18:32 GMT+08:00