[NEWSMP] The Bank of Korea delivered a more pessimistic outlook for Korea's pharmaceutical manufacturing industry. However, expectations for exports have strengthened.
According to the June 2026 Business Survey and Economic Sentiment Index released by the Bank of Korea on June 25, both the June business conditions BSI(Business Survey Index) and the July business outlook BSI for the pharmaceuticals and medicinal chemicals manufacturing sector declined from the previous month, remaining in the 80s.
The BSI is a monthly indicator that measures business sentiment by surveying approximately 3,500 incorporated companies nationwide on their assessment of current business conditions and their expectations for the following month.
The index is calculated by subtracting the number of companies giving negative responses from the number giving positive responses, dividing the result by the total number of respondents, and adding 100.
Accordingly, a BSI below 100 indicates that more respondents gave negative assessments than positive ones, while a BSI above 100 indicates that positive responses outnumbered negative ones.
Earlier this year, the pharmaceutical manufacturing industry's BSI fell sharply in April amid concerns over the conflict between the United States and Iran and large-scale drug price reductions.
At that time, both the April business conditions BSI and the May outlook BSI dropped to 69, marking the lowest level of the year.
However, the index rebounded in May, with the May business conditions BSI recovering to 93, surpassing the 90-point mark, while the June outlook also improved to 87.
The June business conditions BSI, released on June 25, was largely in line with the previous month's forecast. The business conditions index came in at 87, slightly lower than the previous month but matching the earlier forecast.
Exports, however, surged to 108, significantly exceeding the previous forecast of 89. Domestic sales stood at 89, also exceeding the projected 87. As a result, the sales BSI rose to 100, above the earlier forecast of 91.
In contrast, both production and new orders remained at 93, falling short of the projected 96, while the operation ratio also came in at 96, below the forecast of 98.
Meanwhile, capital investment and profitability showed stronger-than-expected performance, with BSIs of 102 and 91, respectively, well above the previous forecasts of 93 and 80.
The July outlook presents a similar pattern. The export, capital investment, and profitability BSIs are projected at 103, 104, and 104, respectively, all above the 100 mark and higher than the previous month's forecasts.
Although the domestic sales outlook BSI remains below 90 at 89, it still exceeds the previous forecast. The sales outlook BSI also improved to 96, above last month's projection.
On the other hand, the business conditions outlook declined to 84, below the previous month's forecast. Production and new orders are both expected to remain at 93, below earlier expectations, while the operation ratio is also projected to 96, below the previous forecast.
