Korea: Supply chain disruptions lead to moderation of PMI in July
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 53.0 in July, down from June’s 53.9. July’s result marked the worst performance since December 2020. As a result, the index remained above the 50-threshold, pointing to a continued, albeit moderating, improvement in business conditions from the previous month. The reading marked a ten-month streak of improvements in business conditions.
New orders continued to rise solidly, though at the slowest rate since January, while output rose at the quickest pace for three months. Employment performed less impressively, expanding at the softest rate for five months. Suppliers’ delivery times continued to increase, which contributed to a fall in stocks of purchases for the first time since October 2020, as firms drew down on existing stocks of purchases. The disruption to supply chains also manifested itself in steeply rising input costs, and a record increase in output prices. Moreover, business confidence for the year ahead was the lowest since December 2020, in part because of the resurgence of Covid-19.