Korea PMI June 2016


Korea: Manufacturing sector sees improvement in June

July 1, 2016

Business conditions in Korea’s manufacturing sector registered a mild improvement in June, after having stabilized in May. The Nikkei Purchasing Managers’ Index (PMI), which is published by Markit, edged up from 50.1 in May to 50.5 in June. Conditions in the manufacturing sector were mildly positive in June as the indicator stood just above the 50-threshold that separates expansion from contraction in the sector.

According to Markit, June’s improvement reflected that manufacturing production increased at the fastest pace since February 2015 fueled by stronger external demand. Consequently, manufacturing firms indicated that they increased their staff and their buying activity. Regarding prices, the survey showed that input prices rose for a fourth consecutive month in June, although businesses continued to cut their output prices due to high competition and pressure from clients.

June’s round of PMIs showed that most Asian manufacturers experienced an increase in business activity. According to Krystal Tan, Asia Economist at Capital Economics:

“Looking ahead, with external uncertainties rising following the UK’s decision to leave the European Union and the weaker-than-expected recovery in China, a strong and sustainable rebound in Asian manufacturing is still some way away.”

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:, Senior Economist

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Korea PMI Chart

Korea PMI June 2016 0

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

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