South Korea's manufacturing confidence for June dipped as the outlook for smaller firms turned negative amid soaring oil prices, the central bank said Thursday.
The Bank of Korea's business survey index (BSI) for manufacturers fell to 88 for June, compared with 92 a month earlier. The index had fallen for the sixth straight month before rebounding in March.
"The June BSI for manufacturers declined as smaller companies expected business conditions to deteriorate on soaring oil prices amid sluggish domestic demand," a BOK official was quoted as saying. "Exporters also have a less gloomy outlook as overseas shipments are likely to be robust on a weaker local currency."
A reading below 100 means pessimists outnumber optimists. The nationwide survey of 2,929 companies was conducted May 15-21.
South Korea is facing mounting inflationary pressure and downside risks to economic growth. Consumer-price inflation rose a higher-than-expected 4.1 percent in April, breaching the BOK's target band of 2.5-3.5 percent for the fifth straight month.
The South Korean economy grew at its slowest pace in more than three years in the first quarter as facility investment dipped amid slowing consumer spending.
The central bank expects Asia's fourth-largest economy to grow 4.7 percent this year, well below the government's target growth of 6 percent.