South Korea’s manufacturing sector experienced a surge in activity during August, achieving its highest growth rate in over three years. This positive trend occurred despite a dip in foreign demand, highlighting the resilience of the domestic market. According to a private survey conducted by S&P Global, the Purchasing Managers’ Index (PMI) for manufacturers in South Korea, Asia’s fourth-largest economy, climbed to 51.9 in August, up from 51.4 in July. This marks the fourth consecutive month where the index has remained above the 50-point threshold, indicating expansion.
The survey’s sub-indexes revealed that the increase in output was driven by a quickening pace of new orders and a slowdown in input price inflation, which reached an eight-month low. Notably, the improvement in demand was primarily attributed to stronger customer confidence and new client wins within the domestic market. While new export orders expanded, the growth was the narrowest in six months. This was due to a mix of strong demand in parts of the Asia-Pacific region, particularly Japan, being offset by weaker demand in China and the United States.
Official trade data released on Sunday corroborated the survey’s findings, indicating a positive trend for South Korea’s August exports. This marks the 11th consecutive month of gains, but the pace of growth has slowed due to decreasing demand for computer chips. The PMI survey also revealed that manufacturers’ optimism about the year ahead strengthened to a three-month high in August. This positive outlook was fueled by hopes for continued improvements in both the domestic and global economies, further bolstered by plans for the launch and mass production of new products.
