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South Korea January Manufacturing Outlook Jumps to 6-Month High

Wednesday, 26 Dec 2012 | 6:30 PM ET
Cheonggyecheon Stream runs through an urban park in Seoul.
Murat Taner | Photographer's Choice | Getty Images
Cheonggyecheon Stream runs through an urban park in Seoul.

South Korean manufacturers remain downbeat on business conditions for the coming month but they are feeling better than they have in the past six months, a central bank survey showed on Thursday.

The Bank of Korea's manufacturing business outlook index for January next year rose to a seasonally adjusted 75 from 69 for December, hitting the highest since July's 81. The December reading, identical with August's, was at the lowest point since the middle of 2009.

The January index also represents the biggest monthly gain since September 2009. Still, the reading below 100 means that companies who expect business conditions to deteriorate in the coming month still outnumber those predicting improvement.

The index has been below 100 since February 2011. The latest findings from the central bank's survey reinforced the market's view that Asia's fourth-largest economy probably reached its trough during the July-September quarter but would show only a gradual recovery.

The Bank of Korea said that between Dec. 12 and 20, it surveyed more than 2,800 companies across the country representing 23 major industries.

Combined sales at South Korea's top department stores rose for the first time in six months in November year-on-year, and at the fastest pace in 11 months, data showed on Thursday, adding to signs the economy is turning around.

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Combined sales at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae rose 9.1 percent in November from a year earlier, the Ministry of Knowledge Economy said in a statement.

This was slightly worse than a 10.2 percent rise estimated by the finance ministry earlier this month but still marked the fastest growth since December 2011. It also ended a five-month run of annual declines in their sales.

Meanwhile, sales at the country's top three discount store chains fell by 1.7 percent in November from a year earlier, following a 6.6 percent drop in October and compared with a 2.1 percent drop initially estimated by the finance ministry.

South Korea's tight labor market and low inflation have improved the purchasing power at households but heightened uncertainties surrounding the global as well as local economy have prompted consumers to cut down spending.