South Korean manufacturers’ confidence fell from the previous month to stay near the lowest level since 2009, keeping pressure on the government and central bank to take further measures to stimulate growth.
An index measuring expectations for October was at 72 from 75 in September, the Bank of Korea said in a statement in Seoul today. The gauge hit 70 in August, the lowest level since May 2009, with any number below 100 indicating that pessimists outnumber optimists.
China’s slowdown and Europe’s debt crisis have crimped demand for South Korea’s exports, which make up about half of Asia’s fourth-largest economy. The Bank of Korea cut rates in July, then refrained from altering borrowing costs for the next two months as the government unveiled stimulus measures.
“External demand is unlikely to pick up until easing by Korea’s key trading partners filters through to the real economy,” Ronald Man, a Hong Kong-based analyst at HSBC Holdings Plc, said before today’s release. “We maintain our call for the Bank of Korea to deliver one more 25 basis point cut in October to boost households’ disposable income and increase domestic demand.”
A measure of expectations at non-manufacturing companies fell to 67, down from 69 in September, today’s report showed. The survey was conducted between Sept. 13 and Sept. 20 with responses from 1,454 manufacturers and 1,049 non-manufacturers.
South Korea’s industrial production probably fell 0.4 percent in August from July, according to a Bloomberg survey of economists before the data are released tomorrow.
To contact the reporter on this story: Patrick Harrington in Tokyo at email@example.com
To contact the editor responsible for this story: Paul Panckhurst at firstname.lastname@example.org