Korea: PMI deteriorates further in June
July 1, 2015
The manufacturing Purchasing Managers’ Index (PMI) fell from 47.8 in May to 46.1 in June, according to a release provided by Nikkei in collaboration with Markit. June’s result is the weakest since September 2012 and sets the index further below the 50-threshold that separates contraction from expansion.
The deterioration in June was driven by contractions in production and new orders. Both fell at the fastest pace in almost three years. Production fell amid a challenging economic environment and new orders were down due to slumping client demand. Manufacturers signaled the MERS outbreak as a top driver behind weakening domestic demand. Export orders declined at the fastest rate this year, underpinned by low global demand. Moreover, given worsening conditions, manufacturers cut employment levels the most since November of last year.
Overall, Markit emphasized that, “June PMI data signalled a further deterioration in operating conditions at South Korean manufacturers.”
Author: Carl Kelly, Economist