Data from the Bank of Korea shows that overall business sentiment in July fell to its lowest level since February last year.
The central bank attributed the drop to growing concerns over the trade spat between the U.S. and China.
The outlook for August also remains gloomy.
Our Ko Roon-hee reports.

Business sentiment among South Korean firms dropped to its lowest level in 17 months.
The Bank of Korea announced on Tuesday...
that the business survey index came to just 75 in July…down five points from the previous month.
A reading below 100 means there are more pessimists than optimists on the local economy.

Meanwhile, confidence among the nation's manufacturers also fell by 6 points in July-- the first drop in the last three months.

The central bank attributed the sharp fall to the rising trade uncertainties between the United States and China.
Many South Korean businesses worry about the impact of the trade tensions because they sell a lot of intermediary goods to China….that are made into final goods and exported to the U.S.
The report also highlighted the uncertainties in the automobile industry… amid fears that the United States could impose tariffs on car imports.

The outlook for next month among manufacturers also remains dim… at just 73 on the BSI.
That's 7 points lower than the previous month's forecast.

Sentiment among non-manufacturers in July was also gloomy…at 76 on the index…which is four points lower than the previous month.
The drop was mainly observed in wholesale and retail businesses.
The Bank of Korea said this is because of low domestic demand during the summer vacation season.
Ko Roon-hee, Arirang News.