S Korea manufacturing sentiment slips in Q3

SEOUL, June 22 (Reuters): A survey of South Korean manufacturers showed business sentiment for the third quarter of the year fell from an over three-year high in the previous survey, but they remained mildly optimistic about the outlook for Asia's fourth-largest economy.
The business survey index (BSI) fell to 103 for the coming July to September quarter, compared with 111 in the previous survey, the Korea Chamber of Commerce and Industry (KCCI) said in a statement.
An index reading above 100 indicates the number of manufacturers who see improvement in business conditions in the coming quarter outnumber those who forecast deterioration.
The reading for the second quarter survey was the highest since the first quarter of 2011 when it hit the same level.
From the fourth quarter of 2011 to the first quarter of 2014, the index had stayed below the neutral level of 100, sustaining a pessimistic stance until last quarter's survey.
The latest survey showed manufacturers expected the country's gradual economic recovery to continue as negative effects from the sinking of the ferry Sewol dissipated. They also struck a positive tone on global demand.
The ferry sinking in mid-April, in which more than 300 people died, was the country's worst maritime accident in decades. The tourism and retail sectors saw business decline in the wake of the disaster, though sales at department and discount-store chains rebounded in May.
Still, roughly 40 per cent of the survey's respondents said overall weak demand onshore and abroad was the biggest hurdle for their businesses in the coming quarter.
Funding issues followed at 19 per cent, while 17 per cent pointed to exchange rates as their biggest problem. The won currency has firmed 3.6 per cent against the US dollar so far this year.
The KCCI said it surveyed 2,473 manufacturers nationwide from May 14 to 27.