Korea: PMI drops in May to 21-month low
June 1, 2015
The manufacturing Purchasing Managers’ Index (PMI) fell from 48.8 in April to 47.8 in May, according to a release provided by HSBC in collaboration with Markit. May’s result is the weakest since August 2013 and sets the index further below the 50-threshold that separates contraction from expansion.
The deterioration in May was driven by contractions in production and new orders. Both fell at the fastest pace in almost two years. Production fell amid a challenging economic environment and new orders were down due to slumping client demand. Export orders declined for the third consecutive month, underpinned by lower demand from China. Moreover, given worsening conditions, manufacturers cut employment levels for the fourth time in the past eight months. Backlogs of work and buying activity were also down in May.
Overall, Markit emphasized that, “latest data highlighted a faster rate of deterioration in operating conditions at South Korean manufacturers.”
Author: Carl Kelly, Economist