South Korea Manufacturing Outlook Rises 4 Points to 80 as Semiconductor BSI Hits 113
Updated
Updated · asiae.co.kr · Jun 29
South Korea Manufacturing Outlook Rises 4 Points to 80 as Semiconductor BSI Hits 113
2 articles · Updated · asiae.co.kr · Jun 29
Summary
South Korea’s manufacturing BSI for Q3 rose to 80 from 76 after a survey of 2,470 companies, signaling a milder downturn even though sentiment remained below the 100 expansion line.
Exporters drove the improvement: their index jumped 16 points to 86, while domestic-focused manufacturers stayed flat at 78 as high inflation and weak local demand continued to weigh on business.
Semiconductors led all industries at 113 for a third straight quarter above 100, with electronics and electrical equipment also improving on AI data-center investment; non-metallic minerals fell to 61, the weakest reading.
SMEs remained stuck at 78 even as large companies recovered to 88 and mid-sized firms to 86 by diversifying supply chains, underscoring a widening split by company size.
Middle East tensions are still reshaping plans: 55.6% of companies said they changed second-half operations, most often on pricing, procurement and operating costs.
Why is South Korea's AI boom failing to lift its struggling domestic economy?
Is the K-shaped recovery splitting South Korea's economy into two separate worlds?
Can South Korea's chip empire survive its critical mineral dependency on China?
South Korea’s 2026 Manufacturing Outlook: Semiconductor-Driven Growth Amid Deepening Economic Polarization and Geopolitical Risks
Overview
South Korea’s manufacturing sector is showing a mixed recovery as Q3 2026 approaches. While large and mid-sized companies have bounced back from the sharp contraction caused by the Middle East war, small and medium-sized enterprises (SMEs) remain stagnant. Sector performance is uneven: non-metallic minerals dropped sharply due to weak construction demand, while oil refining and petrochemicals saw a modest rise but still face negative outlooks from a supply glut in China. The semiconductor boom stands out as the main growth engine, driving robust exports and supporting the broader economy, but its benefits are not evenly shared across all sectors and company sizes.