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Monday, June 30, 2008

South Korean manufacturers' confidence hits the lowest point

In a survey conducted by Bank of Korea in Seoul, it has been found out that South Korea’s manufacturers’ confidence has hit its lowest point in more than three years. Conducted over 1554 manufacturers, the survey showed that rising cost of fuel, increasing cost of raw materials and worldwide economic slowdown has shaken up the manufacturers of Asia’s third largest economy. In addition, domestic problems such as US beef import controversy, truck driver and factory workers' strike have made the situation more critical.

An index measuring business expectation for July fell from 88 to 77. This is the weakest score since February 2005. A score lower than 100 means there are more pessimists than optimists.

It is not only South Korea but all the countries around the world experiencing the problem. Rising fuel cost, coupled with high price of raw materials are eroding consumers’ confidence and eating up company profits. South Korea’s benchmark Kospi index has dropped 11% this year. It will take a more than miracle to turn around South Korea’s condition now.

Related article:
Bloomberg

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