Korea: PMI loses momentum, drops back into contraction territory in March
April 1, 2015
The manufacturing Purchasing Managers’ Index (PMI) fell from 51.1 in February to 49.2 in March, according to a release provided by HSBC in collaboration with Markit. March’s result is the weakest in four months and sets the index below the 50-threshold that separates contraction from expansion. Moreover, the print comes as a disappointment after positive results in the previous months had suggested a recovery in the manufacturing sector.
The poor result in March was mainly driven by a contraction in total new orders, which dropped at the fastest rate in over a year and a half. New export orders decreased for the first time since December amid weak foreign demand. Manufacturing production was also down in March after having expanded at a near-two-year high in February. Despite declines in new orders and production, manufacturers continued to increase employment levels.
Overall, Markit emphasized that, “the latest HSBC PMI data signaled a general worsening in operating conditions in the South Korean manufacturing sector.”
Author: Carl Kelly, Economist