ID :
38545
Fri, 01/02/2009 - 15:48
Auther :
Shortlink :
http://m.oananews.org//node/38545
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S. Korean manufacturers' financial health hits record low
SEOUL, Jan. 2 (Yonhap) -- South Korean manufacturers' financial conditions
deteriorated to a record low in December and are expected to worsen as a global
economic slump begins to hit exports amid sluggish domestic demand, data by the
central bank showed Friday.
The business survey index (BSI) for manufacturers' financial situations declined
to 61 for December, compared with 66 the previous month, according to the Bank of
Korea (BOK). The December figure is the lowest since January 2003, when the BOK
began to compile related data on a monthly basis.
A reading below 100 means pessimists outnumber optimists. The nationwide survey
of 2,929 companies was conducted from Dec. 15-22.
The index for large companies' financial health dropped to 64 in December from 73
in November, reflecting growing concerns that even large firms will face
difficulty in weathering the impact of the sharply cooling economy.
Local manufacturers' outlook for cash flows are even gloomier, with a BSI rating
on expectations for financial conditions coming in at 58 for January, compared
with 65 in December. The index has been on a downward trend since September when
it reached 82, the BOK added.
"The worsening financial conditions confronting local manufacturers came as no
surprise. Slumping sales and financial market jitters are squeezing their funding
situation," said Jun Min-kyu, an economist at Korea Investment & Securities.
"Until the economy gains ground and swift restructuring comes out, their
situation could worsen."
The survey comes as the South Korean economy grew 0.5 percent in the third
quarter from three months earlier, the slowest growth in four years, due to
sluggish domestic demand and lagging export growth. Korean exports declined 18.3
percent on-year in November, the biggest drop in seven years.
Since early October, the BOK has cut the key interest rate by a combined 2.25
percentage points to an all-time low of 3 percent in a move to prop up the
cooling economy.
sooyeon@yna.co.kr
(END)
deteriorated to a record low in December and are expected to worsen as a global
economic slump begins to hit exports amid sluggish domestic demand, data by the
central bank showed Friday.
The business survey index (BSI) for manufacturers' financial situations declined
to 61 for December, compared with 66 the previous month, according to the Bank of
Korea (BOK). The December figure is the lowest since January 2003, when the BOK
began to compile related data on a monthly basis.
A reading below 100 means pessimists outnumber optimists. The nationwide survey
of 2,929 companies was conducted from Dec. 15-22.
The index for large companies' financial health dropped to 64 in December from 73
in November, reflecting growing concerns that even large firms will face
difficulty in weathering the impact of the sharply cooling economy.
Local manufacturers' outlook for cash flows are even gloomier, with a BSI rating
on expectations for financial conditions coming in at 58 for January, compared
with 65 in December. The index has been on a downward trend since September when
it reached 82, the BOK added.
"The worsening financial conditions confronting local manufacturers came as no
surprise. Slumping sales and financial market jitters are squeezing their funding
situation," said Jun Min-kyu, an economist at Korea Investment & Securities.
"Until the economy gains ground and swift restructuring comes out, their
situation could worsen."
The survey comes as the South Korean economy grew 0.5 percent in the third
quarter from three months earlier, the slowest growth in four years, due to
sluggish domestic demand and lagging export growth. Korean exports declined 18.3
percent on-year in November, the biggest drop in seven years.
Since early October, the BOK has cut the key interest rate by a combined 2.25
percentage points to an all-time low of 3 percent in a move to prop up the
cooling economy.
sooyeon@yna.co.kr
(END)
