Korea: Downturn in manufacturing sector softens as PMI hits a seven-month high in November
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) ticked up marginally from 48.4 in October to 49.4 in November, closing in on the 50-threshold that separates contraction from expansion in the manufacturing sector.
The softer deterioration in November was driven by a slower fall in output and employment levels. Moreover, the decline in new orders strengthened in November, but remained soft relative to the average over this year. Meanwhile, new export orders were virtually stable in November relative to the month prior. On the price front, manufacturers cut output prices in November, while input prices increased at a faster pace due to a depreciation in the won. Furthermore, business confidence fell in November due to negative sentiment towards developments in both the domestic and external economy.
Commenting on November’s result, Joe Hayes, IHS Markit economist, noted:
“Manufacturing PMI data for South Korea showed reason to be a bit more optimistic for goods producers, with new product launches in the automotive and electronics sectors providing a lift to output volumes at these firms and those in related supply chains[…] Overall, the PMIs for October and November suggest that firms are starting to build momentum as we head into 2020.”