Korea: PMI improves to highest level in six months, but falls short of expansion territory
October 1, 2015
The manufacturing Purchasing Managers’ Index (PMI) increased from 47.9 in August to 49.2 in September, according to a release provided by Nikkei in collaboration with Markit. The index has improved steadily since hitting a record-low in June and September’s result was the strongest in six months. However, the index it still below the 50-threshold that separates contraction from expansion.
August’s result reflected weaker contractions in four of the five components that make up the index. Production and new orders both decreased at the slowest pace since April. Output and new orders continued to suffer the effects of weak domestic and global economic conditions. New export orders were down in particular amid a fall in the volume of trade with China. Given the challenging environment, manufacturers reduced purchasing activity and cut employment levels again in September.
Overall, Markit analysts emphasized that, “latest survey data pointed to a weaker deterioration in operating conditions in the South Korean manufacturing sector. Production, new orders, employment and stocks of purchases all contracted at weaker rates.”
Author: Carl Kelly, Economist