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Korea: PMI signals continued weakness in manufacturing sector in August

September 1, 2015

The manufacturing Purchasing Managers’ Index (PMI) inched up from 47.6 in July to 47.9 in August, according to a release provided by Nikkei in collaboration with Markit. August’s result was the strongest in four months but the index it still below the 50-threshold that separates contraction from expansion.

August’s result reflected ongoing declines in production and new orders, although the pace of decline in these categories was less pronounced than in the previous month. Production decreased due to unstable economic conditions, weak sales volumes and the MERS outbreak. New orders were down for the sixth straight month amid weak demand from both domestic and foreign clients. Moreover, given the challenging environment, manufacturers reduced purchasing activity and cut employment levels in August.

Overall, Markit analysts emphasized that, “operating conditions in the South Korean manufacturing sector deteriorated at a solid pace in August. This reflected further falls in both production and new orders.”

FocusEconomics Consensus Forecast panelists expect fixed investment to expand 3.8% in 2015, which is down 0.2 percentage points from last month’s forecast. In 2016, the panel expects growth in fixed investment to increase 3.8%.


Author:, Economist

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Korea PMI August 2015

Note: Nikkei Korea Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: Nikkei and Markit


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