New Government Launch Raises Expectations for Biohealth Industry Outlook

[NEWSMP] The outlook for the Korea’s bio-health industry, which had been steadily deteriorating, has seen a sharp turnaround following the launch of the new government, drawing renewed attention.

According to the “Industrial Economic Expert Survey Results (June 2025 Status and July Outlook)” published by the Korea Institute for Industrial Economics & Trade (KIET) on June 22, the Professional Survey Index (PSI) for both the current status in June and the July outlook of the bio-health industry recorded triple-digit figures.

The PSI is a quantified index based on regular monthly surveys of economic conditions across major industries in the manufacturing sector, conducted by a panel of experts including professionals from domestic financial institutions, associations, organizations, and research institutes.

The survey consists of three response options: △Improved (expanded) compared to the previous month, △Same as the previous month, △Weakened (declined) compared to the previous month. The average of the responses is converted into a numerical index ranging from 0 to 200.

A PSI of 100 indicates conditions equivalent to the previous month, while a value closer to 200 indicates a dominant perception of improvement, and a value approaching 0 suggests a prevailing view of deterioration compared to the previous month.

The current PSI for the bio-health industry remained in double digits for six consecutive months following the martial law declaration in December of last year. The outlook PSI also failed to exceed 100 after January, with the exception of recording exactly 100 in February and March.

In particular, the PSI for investment and profitability had declined sharply. The investment PSI, which had climbed to 125 in November last year, plummeted to 65 in December due to the effects of martial law and remained below 100 until April. It recovered to a neutral level of 100 in May.

Similarly, the profitability PSI also stayed below 100 and recorded only 95 in May, even as the investment PSI returned to balance.

However, in the first survey conducted following the launch of the new government, both the June current status and July outlook PSI rebounded to triple digit levels.

In the June current status survey, the business condition index climbed to 119, the highest level since July 2024. This marks the first triple-digit figure since the December martial law declaration.

Exports rose to 114, exceeding the 110 mark, while domestic demand also climbed into triple digits at 105, and production increased to 110.

In addition, investment surged to 124, and profitability jumped to 114, the highest level in nearly four years since it recorded 115 in May 2021.

The July outlook figures were even more optimistic. While the business condition index held steady at 119, domestic demand rose to 119, exports to 124, and production to 129, all significantly higher than the June levels.

Furthermore, investment soared to 138, matching the level seen in April 2021, and profitability increased to 133, surpassing the 130 mark for the first time in nearly four years since September 2021 (132). Notably, this was the highest profitability index since the index was compiled in September 2020.

The report attributed several factors as the basis for these optimistic assessments: the visible expectations following the launch of the new government, which has presented the bio sector as a key policy priority; expectations of economic recovery; anticipated increase in market liquidity; improvements in market conditions; and revisions to the Commercial Act. However, tariffs and drug price cuts were still identified as negative factors.