Korea PMI April 2016

Korea

Korea: Manufacturing activity stabilizes in April

May 3, 2016

Business conditions in Korea’s manufacturing sector improved in April, after having deteriorated in the previous three months. The Nikkei Purchasing Managers’ Index (PMI), which is published by Markit, edged up from 49.5 in March to 50.0 in April. Conditions in the manufacturing sector stabilized in April as the indicator stood at 50.0. A reading above this threshold indicates expansion in the sector, while a reading below suggests contraction.

The improvement in April reflected a slower pace of contraction in production. Firms reported that the contraction in output continued to signal weaker demand from abroad, against a backdrop of more challenging global conditions. Therefore, the sub-indicator of new orders from abroad decreased for the third consecutive month. Meanwhile, manufacturers increased their staffing levels in April, which offset the decrease registered in the previous month. Regarding price developments, April’s survey showed that input prices increased due to higher prices for oil and metals. The recent rally in commodities prices, particularly in energy commodities and base metals, is likely to add further pressure on prices in the coming months.

Regarding the improvement seen in April, Markit commented that, “this shows positive signs for the goods producing sector, and suggests that the official manufacturing production index will remain in positive territory.” Markit added that, “On a less positive note, inflationary pressures intensified to the greatest extent in over three years, amid reports of higher raw material costs. Moreover, companies were unable to compensate for greater cost burdens, as reports of increased competition and price negotiations from clients led firms to reduce their own charges further.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 3.3% in 2016, which is unchanged from last month’s forecast. In 2017, the panel expects growth in fixed investment to increase 3.0%.


Author: Teresa Kersting, Economist

Sample Report

Looking for forecasts related to PMI in Korea? Download a sample report now.

Download

Korea PMI Chart


Korea PMI April 2016

Note: Nikkei 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: Nikkei and Markit


Korea Economic News

More news

Search form