Korea: Manufacturing PMI drops in February
March 2, 2016
The manufacturing Purchasing Managers’ Index (PMI) came in at 48.7 in February, according to a release provided by Nikkei in collaboration with Markit. The result was down from the 49.5 tallied in January and marked the lowest print in six months. February’s reading marked a second consecutive month below the 50-threshold, thus signaling worsening business conditions.
February’s setback mainly reflected a drop in output, new orders and purchasing activity. On top of that, volumes of unfinished work increased, pointing to spare capacity among firms. Regarding price developments, both input and output prices continued to fall, even though at a slower pace than in January. Overall, Markit analysts emphasized that, “the latest survey data pointed to worsening operating conditions in the South Korean manufacturing sector in February. Production contracted at the sharpest rate since August last year, suggesting the official rate of decline in manufacturing production will accelerate from December’s reading of -1.8% (year-on-year). Total new orders also declined at a quicker pace, helped by a decrease in new export orders. Consequently, manufacturers cut back on their buying activity and at the fastest rate since August last year.”