The Survey Index (BSI), a survey of the top 600 companies of the Republic of Korea in terms of sales four consecutive months. This was recently disclosed by the FKI.
A BSI reading below the break even 100 mark indicates that companies are pessimistic about their business. Their pessimism is ascribed to retarded economic recovery, a delay in regaining consumer confidence and economic uncertainties in the Eurozone and Japan.
Business Survey Index by Federation of Korean Industries
'Despite the new economic team? announcement of economic policy directions on July 24 and the decision of the Bank of Korea (BOK) to bring down the key rate on Aug. 14, 2014, businesses are still delivering gloomy predictions on their business due largely to a weak momentum of business recovery,?an FKI official explained. ?he government, therefore, needs to carry out deregulation, and lawmakers are asked to deal with bills for economic revitalization immediately in such a way as to provide vitality for business recovery, and boost domestic demand,?he stressed.
By sector, the monthly index was generally negative with 98.5 for domestic demand, 96.0 for export, 97.9 for investment, 96.3 for financial conditions, 104.2 for inventories, 99.4 for employment, and 93.8 for profitability.
When the index for inventories goes over 100, the response is negative, implying that inventories are in excess.
Meanwhile, the BSI for performances came to 89.0 in August, slipping to a six-month low. The BSI recorded poor performances in almost every sector with 89.2 for domestic demand, 91.3 for export, 98.1 for investment, 96.5 for financial conditions, 106.9 for inventories, 99.4 for employment, and 89.8 for profitability.