Manufacturing Sales Expected to Slow This Year... Semiconductor and Shipbuilding Seen Holding Last Year’s Levels

According to The Financial News, a survey has found that manufacturing sales are expected to decline this year compared with last year. This is interpreted as reflecting the continued impact of sluggish domestic demand and persistent uncertainty in external supply chains amid rising volatility in financial markets.
The Korea Institute for Industrial Economics & Trade (KIET) announced on the 18th that, based on a survey of the Business Survey Index (BSI) conducted from the 8th to the 19th of last month on 1,500 domestic manufacturing companies, this year’s sales outlook BSI is projected to be 95, falling short of the baseline.
The Business Survey Index (BSI), with 100 indicating no change from the previous quarter, implies that the closer it is to 200, the more respondents report an increase (improvement) compared with the previous quarter, while the closer it is to 0, the more respondents report a decrease (deterioration).
By industry, the bio-health industry recorded a BSI above 100, indicating an optimistic sales outlook, while the semiconductor and shipbuilding industry sectors are also expected to maintain last year’s sales levels.
In contrast, concerns over weak sales have eased somewhat in home appliances, general machinery, the steel industry, textile, and rechargeable battery sectors. However, in the display manufacturing industry, wireless communication devices, the automotive industry, and oil refining, worries about sluggish sales have actually intensified.
For the first quarter of this year, the manufacturing sales outlook BSI also came in at 93, below the baseline. On a quarterly basis, the sales outlook BSI has remained under the benchmark level of 100 for seven consecutive quarters since the third quarter of 2024. Aside from sales, the first-quarter outlook BSI for overall business conditions (91), exports (95), facility investment (96), employment (98), and funding conditions (88) all failed to reach 100 as well.
By sector, outlooks were relatively stronger for semiconductors, the shipbuilding industry, the chemical industry, and the bio-health industry, while they remained low, particularly in material-related sectors such as oil refining, the steel industry, and textile.
In a separate survey on current issues, domestic manufacturers cited heightened volatility in financial markets—specifically in the exchange rate and interest rate (43%)—as the factor having the greatest impact on their current business activities. This represents a sharp increase compared with the previous quarter’s figure of 23%.
As for the expected benefits of adopting artificial intelligence (AI) technologies, many companies pointed to support for automation (management and inspection) at 39.9% and support for management decision-making at 35.9%, although a considerable share, 37.1%, responded that they “do not know yet.” To promote the adoption of AI technologies, respondents most frequently cited sharing industry-specific use cases and information (50.3%), followed by support for adoption costs and tax incentives (48.3%).

syj@fnnews.com Seo Young-jun Reporter