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South Korea’s business sentiment rebounded in August for the first time in two months, driven by stronger exports and consumer activity. Non-manufacturing confidence in particular recorded its steepest rise in over four years, buoyed by holiday demand and government-issued consumption coupons.

According to the Bank of Korea’s August Business Survey Index (BSI) released on August 27, overall business sentiment across industries rose to 91.0, up one point from the previous month. The outlook for September climbed even higher to 91.8, up 3.4 points. Manufacturing sentiment improved to 93.3 (+1.4), while non-manufacturing sentiment rose to 89.4 (+0.7).

The most notable gain was in the non-manufacturing outlook, which jumped 4.7 points to 91.5 — the largest increase since May 2021. The Bank of Korea cited expanded travel demand during the summer holiday season, the rollout of consumer coupons, and recovery expectations in leisure-related industries. “The surge in non-manufacturing outlook reflects broader improvements across most sectors,” said Lee Hye-young, head of the central bank’s Economic Sentiment Survey Team, adding that even industries with weak current performance viewed future prospects more positively as off-peak conditions eased.

Manufacturing sentiment also strengthened in August, led by semiconductors and automobiles. The auto sector improved as declines in U.S.-bound exports moderated, while electrical equipment benefited from rising electric vehicle sales and renewable energy investment. Growth in semiconductor equipment exports and defense-related orders further boosted confidence.

The Economic Sentiment Index (ESI), which combines business and consumer sentiment, rose 1.7 points to 94.6, with its cyclical component climbing 0.8 points to 92.4.

“Semiconductors and autos are driving the rebound, helped by easing uncertainties after recent trade negotiations,” Lee noted. “However, business outlooks do not always translate directly into actual performance, so the coming months will require close monitoring.”