South Korean Manufacturers’ Confidence Rises to 7-Month High

By Shinhye Kang

April 30 (Bloomberg) -- South Korean manufacturers’ confidence rose to the highest level in seven months, adding to signs that the economy’s slowdown may be abating.

An index measuring expectations for May advanced to 71 from 60 in April, according to a survey of 1,412 manufacturers released by the Bank of Korea in Seoul today. The index reached 44 in January, the lowest since the series began in 1991. A score of less than 100 means pessimists outnumber optimists.

Across Asia, there is mounting evidence that government spending packages and interest-rate cuts are buoying domestic demand, while a pickup in China is beginning to stoke exports. South Korea’s economy expanded 0.1 percent in the first quarter, following a 5.1 percent contraction in the previous three months.

Sentiment among Korean consumers for April climbed to the highest in at least nine months, the central bank said this week. The Kospi stock index has gained 19 percent this year after falling 41 percent in 2008.

An index measuring the outlook for exports rose to 78 from 70 and a gauge for domestic sales increased to 77 from 64, today’s report showed.

Goldman Sachs Group Inc., UBS AG, Deutsche Bank AG and Citigroup Inc. have all raised their 2009 gross domestic product forecasts for South Korea since the central bank released first- quarter figures on April 24.

An index of non-manufacturing companies’ expectations advanced to 74 from 63 in the previous month. The Bank of Korea polled the manufacturers and 717 non-manufacturers between April 15 and April 22.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.