Korea: PMI jumps into expansionary territory at close of 2015
January 1, 2016
The manufacturing Purchasing Managers’ Index (PMI) came in at 50.7 in December, according to a release provided by Nikkei in collaboration with Markit. The result was up from the 49.7 tallied in November and marked the highest reading in 10 months. The index has improved since hitting a record-low in June, and is now above the 50-threshold that separates contraction from expansion for the first time since February.
November’s improvement was driven by gains in all components of the index, including production levels and new orders. Production increased for the first time since February, with manufacturers citing new product launches, new contracts and higher orders in the automotive sector. Overall, new orders also returned to growth for the first time since February. Total new orders increased on the back of stronger domestic demand, while new export orders decreased amid unstable global conditions. Meanwhile, employment and purchasing activity registered notable gains.
Overall, Markit analysts emphasized that, “in the final month of 2015, operating conditions improved at South Korean manufacturers. Production and new orders both expanded for the first time since February resulting in greater employment growth and a rise in input buying.”
Author: Carl Kelly, Economist