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Confidence among South Korean businesses weakened first in four months due to the sluggish exports, of which the falling pace was increasingly faster, central bank data showed Friday.
Business survey index (BSI) for manufacturers stood at 75 in May, down 5 points from a month earlier, according to the Bank of Korea (BOK). It was the first decline in four months.
The index, gauges expectations for business conditions, means that pessimists outnumber optimists when it stays below 100.
The April decline came as lackluster exports aggravated business conditions of the economy, which depends on exports for about half of its growth.
The declining pace of the country's exports became faster from 0.9 percent in January to 3.3 percent in February, 4.3 percent in March and 8.1 percent in April. The May exports are expected to tumble more than 10 percent.
The sluggish exports had negative impacts on small-sized subcontractors that supply parts and components for large exporters.
The BSI for large corporations declined from 86 in April to 81 in May, with the figure for small companies sliding from 73 to 68 in the same period.
The prospective BSI for June also declined 5 points from a month earlier to 77, indicating concerns over business conditions among manufacturers.
Manufacturers picked weak domestic demand, weak, economic uncertainties and fiercer competition as main obstacles to doing business.
The May BSI for non-manufacturers fell 1 point from a month earlier to 75. The prospective BSI for June declined 2 points to 76 on a monthly basis.
Non-manufacturers cited fragile domestic demand, economic uncertainties and fierce competition as their major difficulties in doing business. Enditem
