Korean Manufacturers Turn Less Pessimistic as Chips and Cosmetics Lift Outlook

South Korean manufacturers became less pessimistic about the fourth quarter as strong semiconductor and cosmetics exports improved expectations, although the overall outlook remained below the threshold indicating broad optimism.

The business survey index for manufacturers reached 86 for the October-to-December period, according to a survey by the Korea Chamber of Commerce and Industry. The reading was six points higher than in the previous quarter and marked a second consecutive quarterly improvement.

The survey covered 2,413 manufacturers across the country. An index reading above 100 means more respondents expect business conditions to improve than worsen, while a reading below 100 indicates pessimists remain in the majority. The latest result therefore points to a recovery in confidence rather than a full shift to optimism.

Semiconductor companies reported the strongest expectations. The sector’s index climbed to 139, the highest level since the survey began, and remained above 100 for a fourth consecutive quarter. The result reflects the central role of chip exports in supporting South Korea’s manufacturing cycle and broader economic momentum.

Cosmetics manufacturers also recorded a positive outlook, with their index rising 20 points to 120. Medical and precision equipment companies moved into optimistic territory as well, gaining 28 points to reach 108. The gains suggest that the improvement is extending beyond chips to other export-oriented industries with growing overseas demand.

However, the survey also showed that stronger export expectations have not eliminated pressure on corporate earnings. About 60.4 percent of manufacturers said they expect their operating profit for the year to fall short of their initial targets. Respondents cited persistently high costs for raw materials and energy as major constraints.

The contrast between robust export sectors and weak overall profitability highlights the uneven nature of the manufacturing recovery. Chips, cosmetics, and precision equipment are lifting sentiment, but many companies remain exposed to input-cost pressures and uncertain demand.

For the broader economy, the fourth-quarter survey offers a cautiously improved signal. Confidence is moving in a favorable direction, yet the index’s position below 100 means most manufacturers are not ready to declare a decisive turnaround. Whether stronger export performance translates into wider gains will depend in part on companies’ ability to manage costs and improve margins.