Korea: Manufacturing PMI marks the highest reading since February in August
September 1, 2020
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) rose to 48.5 in August, from 46.9 in July, closing in on the 50-threshold that separates an improvement from a deterioration in manufacturing conditions, and marking the highest reading since February.
August’s result was due to a more modest reduction in output as well as a moderation in the decline in new orders. Accordingly, the decline in employment eased. Turning to prices, price increases for raw materials, including oil, increased firms’ costs, although output prices continued to fall in an effort to foster demand.
On the print, Tim Moore, director at IHS Markit said the data ”provides another signal that a turning point has been reached for the South Korea manufacturing sector”. On expectations, he stated: “The proportion of manufacturers forecasting a rise in production in the next 12 months now exceeds those forecasting a decline, the first time the PMI survey has pointed to positive expectations since February.”
Author: Frederico Teixeira de Abreu, Junior Economist