Bank of Korea Predicts Expansion in Pharmaceutical Industry Sales, Domestic Demand, and Exports

[NEWSMP] The Bank of Korea and the Korea Institute for Industrial Economics and Trade (KIET) continue to offer diverging outlooks on the performance of the pharmaceutical industry.

While KIET maintains a positive outlook, the Bank of Korea's report remains largely pessimistic. However, both reports offer optimistic projections on indicators such as overall sales, domestic sales, and exports.

According to the Bank of Korea's November 2024 Business Survey and Economic Sentiment Index released on the November 24th, the business condition index (BSI) for the manufacture of pharmaceuticals, medicinal chemicals and botanical products sector was 88 in November, and the December forecast stood at 86, both well below 100.

The BSI is a monthly index of business conditions and outlook for the following month, compiled by surveying more than 3,500 corporations nationwide about current business conditions and future prospects.

The index is calculated by subtracting the number of companies giving negative responses from those giving positive responses, dividing the result by the total number of respondents, and adding 100.

Consequently, a BSI value below 100 indicates that more respondents gave negative responses, while a value above 100 indicates more positive responses.

KIET, which previously released the Professional Survey Index (PSI) based on a similar survey method, reported a PSI of 115 for the bio-health industry in November and 110 in December, reflecting a predominantly positive evaluation.

The Bank of Korea's report, which gave negative assessments of both the November conditions and December outlook, also provided a positive evaluation of the pharmaceutical industry's sales, domestic demand, and exports.

The November performance BSI for sales was 108, 110 for exports, and 102 for domestic sales, all exceeding 100. Similarly, the December outlook showed revenue and exports at 112 and domestic sales at 108, not only surpassing 100 but also exceeding the November values, reflecting a predominantly positive assessment.

In addition, production was also positively evaluated, with the November performance at 110 and the December outlook at 116. Capacity utilization likewise exceeded 110, scoring 110 in November and 114 in December.

However, facility investment remained below 100, with a November performance of 96 and a December outlook of exactly 100. Profitability also remained below 100, with both the November performance and outlook scoring 96.

Additionally, financial situation and labor force situation remained below 100 in both performance and outlook. Meanwhile, raw material purchases prices were recorded 127 and 129 in November and December, respectively, indicating persistent cost burden.