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Korean manufacturers' August biz sentiment hits 6-month low

2013/07/29 06:00

SEOUL, July 29 (Yonhap) -- South Korean manufacturers' business sentiment for August declined to the lowest level in six months on a seasonal factor and lingering economic uncertainty, the central bank said Monday.

The index that gauges manufacturers' outlook on business conditions came in at 73 for August, down from the 78 tallied for July, according to a monthly survey from the Bank of Korea (BOK). The index measures manufacturers' expectations for the coming month.

It marked the lowest level since February when the sentiment index hit 72, the central bank said.

A reading below the benchmark 100 means pessimists outnumber optimists. The index is based on a nationwide survey of 2,541 companies conducted from July 15-22.

The index gauging manufacturers' assessment of current business conditions reached 72 in July, down from 79 in June and the lowest since February, it added.

A BOK official said that manufacturers' confidence is usually weak around this time as factory operations slow during the summer vacation season.

"Prolonged slump in demand at home and abroad seemed to affect manufacturers' sentiment," he said.

The data come as the Korean economy grew 1.1 percent on-quarter in the second quarter, the fastest in over two years, on the back of increased fiscal spending.

But consumer spending and facility investment still remained weak, indicating that the growth momentum has yet to be seen as sustainable.

Downside risks to growth such as uncertainty over the Federal Reserve's stimulus tapering and concerns about China's slowdown still persist, experts say.

The index gauging smaller firms' outlook on business conditions came in at 70 for August, down from the 75 recorded for July. The index measuring exporters' confidence for August reached 80, down from 86 for July, the BOK said.

Manufacturers chose sluggish domestic demand as a major setback in doing business, but the portion of companies picking sluggish exports and steep competition increased compared with a month earlier.