South Korea’s manufacturing PMI falls to 49.9 in February

Manufacturing conditions in South Korea remained stable after a slight improvement at the start of the year.

The seasonally adjusted S&P Global South Korea Manufacturing Purchasing Managers' Index (PMI) fell to 49.9 in February from 50.3 in January, according to S&P Global’s report.

This suggests that manufacturing conditions in South Korea was broadly unchanged following a slight improvement at the start of the year.

Survey data for February indicated a second consecutive monthly rise in the volume of new orders received by South Korean manufacturers. Whilst the pace of increase was marginal, it was slightly higher than in January.

New export orders also grew in the latest survey period, but only at a fractional rate. Improved demand in the Asia-Pacific (APAC) region was broadly offset by weaker sales to Europe and the US.

Business confidence in the 12-month growth outlook eased and was weaker than the series average. As optimism weakened, firms also lowered employment to the largest degree since July 2022.

Purchasing activity saw only a slight increase in February as production requirements were muted. Concurrently, firms reduced their stock of pre-production goods, reflecting reluctance to hold excess inventories.

On the price front, February data showed a robust increase in input costs amidst rising raw material prices, notably for metals.

Additionally, firms also noted that unfavourable exchange rate fluctuations impacted input costs. Consequently, output charges were raised at the fastest rate pace in 15 months.