South Korean firms' business sentiment worsened this month due to a surge in COVID-19 infections and rising prices of raw materials.
According to the central Bank of Korea on Friday, the business survey index(BSI) for all industries stood at 87 for July, down one from the previous month.
It marks the first drop in five months since March when it came to 83. A reading below 100 means pessimists outnumber optimists.
The BSI for manufacturers also dropped one point on-month to 97 in July, the highest since April 2011 when it marked 99. The BSI for non-manufacturers, which includes restaurants, wholesale and retail businesses, fell two points to 79.
Local firms' BSI for August plunged six points on-month to 84.