Korea PMI


Korea: Despite rise in July, PMI stays in contraction territory

August 1, 2014

The manufacturing HSBC Purchasing Managers’ Index (PMI) rose from 48.4 in June to 49.3 in July, which represented the first increase in the index after three consecutive months of decrease. Despite July’s increase, the PMI index continued to hover below the 50-threshold that separates contraction from expansion in the manufacturing sector.

According to HSBC, “the PMI has been in negative territory four times this year, although the latest reading indicated only a marginal deterioration in performance compared to June.” July’s result showed that output and new business fell over the previous month, although at a slower pace. In addition, backlogs and finished goods fell sharply over the previous month, “due to a reduction in the number of new orders received.” HSBC concluded that, “Korea’s manufacturing sector remains weak and it suggests that downside risks to Korea’s economic outlook remain.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 3.9% in 2014, which is up 0.2 percentage points from last month’s forecast. In 2015, the panel expects growth in fixed investment to moderate to 3.7%.

Author:, Senior Economist

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Korea PMI Chart

Korea PMI July 2014 0

Note: HSBC Korea Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: HSBC and Markit

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