South Korea’s Manufacturing Growth in August

SEOUL (Reuters) – South Korea’s factory activity growth quickened in August, as output expanded at its fastest pace in over three years despite a slowdown in overseas demand, a private survey showed on Monday.

The Purchasing Managers’ Index (PMI) for manufacturers in Asia’s fourth-largest economy, compiled by S&P Global, stood at 51.9 in August on a seasonally adjusted basis, up from 51.4 in July.

The index remained above the 50 mark, which separates expansion from contraction, for a fourth consecutive month.

“August provided a stronger picture for the South Korean manufacturing sector,” said Usamah Bhatti, economist at S&P Global Market Intelligence.

Output rose at the fastest pace since April 2021, as the increase in new orders quickened, while inflation in input prices slowed to an eight-month low, sub-indexes showed.

The improvement in demand was broadly led by stronger customer confidence and new client wins in the domestic market, according to the survey.

However, expansion in new export orders was the narrowest in six months, with strong demand in parts of the Asia-Pacific region, notably Japan, offset by weakness in China and the United States.

Official trade data released on Sunday supported the survey’s findings, indicating the 11th month of gains for South Korea’s exports in August, albeit with a weakening growth pace as demand for computer chips declined.

The PMI showed that manufacturers’ optimism for the year ahead strengthened to a three-month high last month, driven by hopes for sustained improvements in both domestic and global economies, bolstered by plans for the launch and mass production of new products.