South Korean firms' business sentiment for July worsened on concerns over the trade dispute between the U.S. and China. 

According to the Bank of Korea on Tuesday, the business survey index(BSI) for July for all industries stood at 75, down five points from the previous month.

The index fell to 77 in March and rebounded to 79 in April and 81 in May, but slipped to 80 in June.

The July figure was the lowest to be posted since February of last year. The drop was the sharpest since June 2015 when domestic demand drastically contracted due to the outbreak of the Middle East Respiratory Syndrome. 
 
The BSI for manufacturers reached 74, down six points, the biggest decline since June 2015. The index for non-manufacturers dropped four points to 76. 

Meanwhile, a survey by the Korea Economic Research Institute on companies that ranked within the top 600 in terms of recent sales found that the BSI outlook for August came to 89-point-two, or the lowest to be posted in 18 months. 

The BSI measures corporate confidence. A reading below 100 means that the majority of firms have a negative outlook for the economy.