Korea: Manufacturing sector downturn eases in August
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) increased to 49.0 in August from 47.3 in July, but remained below the 50-threshold that separates expansion from contraction in the manufacturing sector.
Output, employment and new orders all declined in August. That said, the contractions in new orders and output were more moderate than in the prior month. In contrast, the dip in employment levels was sharper in August compared to July. On the price front, a weaker currency and higher raw material costs were partly to blame for the increase in input prices. The weaker won and recent rifts with Japan kept business sentiment relatively subdued.
Commenting on August’s result, Joe Hayes, IHS Markit economist, noted:
“While the pick-up in the headline index suggests that pressures on South Korean manufacturers have abated to an extent, underlying data still portray a deeply challenging environment […] With an expansionary monetary policy bias becoming increasingly widespread across Asia, there is a glimmer of hope that Korean exports may see some respite in coming months.”