Business sentiment among South Korean manufacturers inched up for January from a three-month low in December as the local economy shows signs of improvement, the central bank said Friday.

The index that gauges manufacturers' outlook on business conditions reached 79 for January, up from 78 recorded for December, according to a monthly survey from the Bank of Korea (BOK). The index measures manufacturers' expectations for the coming month.

A reading below the benchmark 100 means pessimists outnumber optimists. The index is based on a nationwide survey of 2,537 companies that was conducted Dec. 13-20.

Meanwhile, the index gauging manufacturers' assessment of current business conditions came in at 76 in December, down from 78 in November, it said.

The business sentiment index among exporters for January reached 84, up from 75 tallied in December. The indicator gauging larger firms' outlook for next month came in at 82, compared with 81 for December, the BOK said.

The poll showed more manufacturers cited the won's gain and sluggish domestic demand as major difficulties in December compared to the previous month.

Local manufacturers had more positive outlook for next year, reflecting their optimism about economic recovery.

The index measuring manufacturers' outlook on business conditions for 2014 came in at 88, up from 78 recorded for this year, according to the BOK.

The BOK said that the Korean economy will likely grow 3.8 percent next year after advancing 2.8 percent this year. (Yonhap News)