Business sentiment has reversed after a brief recovery, with the March CBSI slipping to 94.1 and companies blaming higher raw-material and logistics costs amid signs that the Middle East war may be prolonged. According to joint reporting that cites Bank of Korea data, manufacturing and non-manufacturing outlooks for April fell further, even as certain export sectors remain strong.

The Bank of Korea’s composite business survey index (CBSI) fell to 94.1 in March, a 0.1 percentage-point decline from the previous month, ending the short-lived upward trend seen earlier. Firms cited rising costs for raw materials and logistics as immediate pressures, and available reports indicate that these cost trends are being compounded by concerns over the broader regional conflict. The report, published on March 27, 2026, stresses that the conflict’s economic spillovers have directly affected business sentiment.

Looking ahead, the April outlook shows deeper pessimism. The manufacturing outlook index dropped to 95.9, down 3 percentage points, while the non-manufacturing outlook tumbled to 91.2, down 5.6 percentage points, according to the provided source notes. Those declines suggest that firms expect tougher conditions in both goods-producing and services sectors if geopolitical uncertainty persists. The data cited in the joint Chosun report and BOK statistics make clear that expectations weakened more sharply in services than in manufacturing.

Yet the economic picture is not uniformly negative: exporters in key industries are still finding pockets of strength. The summary notes that semiconductor and automobile exports remain healthy, which has so far helped cushion some downside. Even so, firms and analysts quoted in the reporting emphasize that export gains are being overshadowed by elevated uncertainty, meaning that solid export performance may not be sufficient to reverse the prevailing risk-off mood among businesses.

For policymakers and corporate planners, the immediate implication is the need to manage both cost pressures and risk perception. Rising raw-material and logistics costs are tangible issues companies face now, while the potential for a protracted Middle East conflict adds a layer of uncertainty that can damp investment and hiring decisions. According to the provided materials, the combined message from joint reporting and BOK data is that while some export sectors remain resilient, the overall balance of signals has tilted toward greater caution among businesses.