S. Korea’s factory PMI drops to 51.4 in July

South Korea’s manufacturing sector continued to expand in July for the third consecutive month, albeit at a slower pace, according to the S&P Global Purchasing Managers’ Index (PMI) on Thursday.

The index came in at 51.4, down from the 26-month high of 52.0 recorded in June but still indicating growth.

While both output and new orders increased, the pace of expansion moderated as firms reported muted domestic demand, said Usamah Bhatti, economist, S&P Global Market Intelligence

However, new export orders grew for the seventh straight month, with marginal weakening from the previous month’s five-month high.

The survey highlighted improved export performance in key markets such as the United States, Japan, and Southeast Asia.

“Firms were more optimistic regarding the year-ahead outlook for output, as they were hopeful that the current uplift in demand from international markets would feed into the domestic economy and provide further boosts to demand,” Bhatti added.

South Korea’s economy unexpectedly contracted in the second quarter, raising concerns about the unevenness of the recovery. However, a recent improvement in consumer sentiment has offered some relief.

The PMI survey in July revealed a rebound in manufacturers’ optimism for the upcoming year compared to June, which was the lowest in six months. Firms anticipated an acceleration in demand growth.

Attribution: Reuters