Korea: PMI stalls in contractionary territory in October
November 2, 2015
The manufacturing Purchasing Managers’ Index (PMI) came in at 49.1 in October, according to a release provided by Nikkei in collaboration with Markit. The result was broadly unchanged from the 49.2 tallied in September and interrupts a three-month streak of gains after the index hit a record-low in June. The index remains below the 50-threshold that separates contraction from expansion.
October’s result reflected ongoing weakness in production levels and new orders. Production declined for the eighth straight month amid global economic uncertainty and sluggish demand. New export orders were down due partly to diminished trade with China. Given the challenging environment, manufacturers reduced purchasing activity and cut employment levels again in October.
Despite the disappointing result, October’s declines were less pronounced than in previous months. Overall, Markit analysts emphasized that, “manufacturing conditions deteriorated at a weak pace at the start of the final quarter. Production and new orders both decreased at marginal rates, alongside soft contractions in both employment and buying activity. Similarly, international demand declined only fractionally during the month.”
Author: Carl Kelly, Economist