South Korean Manufacturers
South Korean manufacturers' confidence declined from a three-month high on concern soaring raw material costs will reduce profits.
The index measuring expectations for April fell to 88 from 90 the previous month, according to a survey of 1,434 manufacturers released by the Bank of Korea in Seoul today. A score lower than 100 means pessimists outnumber optimists.
Higher costs may damp consumer spending and prompt South Korean companies to pare investment and hiring as their earnings are crimped. That may cool an economy that already is facing slowing exports as a looming U.S. recession damps global growth.
The benchmark Kospi index of shares has dropped 10 percent this year. Rising raw-material prices are the biggest concern for Samsung Electronics Co. and other manufacturers, the central bank said in today's confidence report.
South Korea's Posco said last week it plans to increase product prices in April to try to pass on higher coal and iron- ore costs to customers and halt a slide in earnings.
Chief Executive Officer Lee Ku Taek said last month that the business environment this year would be “tougher'' because of rising costs and a global economic slowdown. Asia's third- biggest steelmaker reported a 20 percent decline in fourth- quarter profit.
Companies and consumers across Asia are paying more for fuel, food and other commodities, prompting governments in the region to stockpile goods, regulate prices and subsidize utility bills in efforts to ease cost pressures 500 fast cash payday advance.
Tariffs Removed
South Korea's government said this month it will temporarily remove tariffs on 70 items, including grains and oil, in an effort to damp inflation.
South Korea purchases 97 percent of its energy needs from overseas, making it the world's fifth-biggest importer of crude oil. The price of Dubai crude, an Asian benchmark, has surged 74 percent since the start of 2007, reaching a record this month.
An index measuring manufacturers' expectations for domestic sales fell to 104 from 107, while that for exports rose to 107 from 106.
The government had forecast that increased spending by households and companies would take over from exports as the main drivers of economic growth this year.
An index of non-manufacturing companies' expectations for April dropped to 79 from 90 on growing concern that sales and profits may slow and because they are facing a shortage of labor, today's report showed.
The Bank of Korea surveyed the manufacturers and 717 non- manufacturers from March 17 to March 24.