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Korea PMI May 2024

Korea: Manufacturing PMI rises in May

The S&P Global South Korea Manufacturing Purchasing Managers’ Index (PMI) rose to 51.6 in May from 49.4 in April. As a result, the index moved above the 50.0 no-change threshold, and signaled an improvement in manufacturing-sector operating conditions compared to the previous month.

Key drivers behind the latest PMI reading include a significant increase in manufacturing output, which reached its highest level in nearly three years, driven by a revival in factory orders. Both domestic and international demand contributed to this uptick, with new export orders increasing for a fifth consecutive month. Employment also saw a return to growth, and purchasing activity accelerated. A rise in global demand for AI is benefiting Korean manufacturing firms in the electronics and IT sectors.

There was a noted increase in cost pressures in May, primarily due to higher commodity prices and unfavorable exchange rate movements. This led to a rise in output charges for the ninth consecutive month, although the rate of inflation was moderate and slightly weaker than before. Business sentiment among South Korean manufacturers remained positive, with firms planning for new product launches and expanding their workforces in anticipation of future sales growth.

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