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The business sentiment index, which had seen some progress, fell again because of the consequences of the Middle East conflict. This was caused by higher raw material costs and greater transportation expenses. According to the Bank of Korea’s “March Business Survey” released on the 27th, the overall business sentiment index (CBSI) for all sectors dropped by 0.1 percentage points from the previous month to 94.1. The index had increased by 0.2 percentage points in the prior month but reversed its trend after just one month.

The CBSI is a combined measure that represents important business sentiment indices. It is based on the long-term average (January 2003–December 2025) which is set to 100, where readings above 100 show confidence and those under indicate doubt.

The business sentiment index for non-manufacturing sectors, encompassing the service industry, fell by 0.2 percentage points to 92.0 compared to the previous month, influenced by deteriorating funding situations and economic conditions. In contrast, manufacturing, which benefited from higher exports driven by semiconductors, remained stable at 97.1.

Lee Heung Hoo, leader of the Bank of Korea’s Economic Sentiment Survey Team, stated, “In March, favorable elements including more operational days and rising exports of semiconductors, vehicles, and steel goods counterbalanced the effect of the Middle East conflict on the manufacturing industry.”

With indications of a long-lasting Middle East conflict, the projection for next month’s business confidence index revealed a decrease: manufacturing declined by 3 percentage points to 95.9, while non-manufacturing fell by 5.6 percentage points to 91.2.

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