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S. Korean manufacturing confidence dips for Aug.
Writer : Sender
Jul 29, 2010
South Korean manufacturers' business confidence declined to a five-month low for August due mainly to seasonal factors, the central bank said Thursday.
The index of manufacturers' business expectations came in at 102 for August, down from 104 for July, according to the Bank of Korea (BOK). The August reading was the lowest since the outlook index reached 101 for March.
The index measures manufacturers' outlook on business conditions for the coming month. Despite August's fall, the business outlook index stayed above the benchmark 100 for six months in a row, indicating that optimists outnumber pessimists. The nationwide survey of 2,774 companies was conducted between July 15-22.
"During summer vacations, overall demand and manufacturers' business operations remain slack," said Son Won, an official at the BOK, adding that it is too early to say that the outlook index was on a downward trend.
Meanwhile, the index gauging manufacturers' assessment of current business conditions reached 103 in July, down from 105 in June when it reached the highest level since the second quarter of 2002, the central bank noted.
The South Korean economy is on a solid recovery track, powered by robust exports and improving domestic demand. Asia's fourth-largest economy grew 1.5 percent in the second quarter from three months earlier.
But concerns about the flagging global economy and an expected slowdown of the Korean economy in the second half following sharp growth would serve as major worries for the country, analysts said.
In a separate survey by the Federation of Korean Industries, a majority of large local companies was optimistic about their business conditions in August, but the portion of optimists fell for the third straight month due to the slowing global economic recovery and higher interest rates.
The BOK hiked the key interest rate to 2.25 percent from a record low of 2 percent in July to stem mounting inflationary pressure, ending a 16-month stand-pat run.
(Source: Yonhap News)
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