Korea: Manufacturing PMI records worst reading since October 2020 in August amid latest Covid-19 outbreak
September 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) came in at 51.2 in August, down from July's 53.0, amid disruptions caused by the latest Covid-19 outbreak and subsequent containment measures. August's result marked the weakest reading since October 2020. Nevertheless, the index remained above the 50-threshold, but pointed to a moderating improvement in business conditions from the previous month.
The latest surge in Covid-19 cases and consequential restrictions dragged on momentum in manufacturing activity, leading to slowing growth in new orders, new jobs and purchasing activity. In detail, new orders rose at a 10-month low, while the rate of employment creation was marginal. Meanwhile, on the price front, input prices rose at a softer rate, while output prices also increased in August.
On the outlook, USamah Bhatti, economist at IHS, noted:
“Firms commonly noted that global shortages of raw materials and freight capacity, notably in the semiconductor market had led to weaker readings across the majority of indices, yet businesses remained confident that this would pass, and activity would rise over the next 12 months. South Korean manufacturers commented that this recovery would be aided by the dissipation of the pandemic, which would help to reduce supply chain bottlenecks”