SEOUL: South Korean factory activity expanded in January for the first time in 19 months, a private survey showed on Thursday, as production and orders returned to growth as demand improved in key export markets.
The Purchasing Managers' Index (PMI) for the Korean manufacturing industry compiled by S&P Global was seasonally adjusted to 51.2 in January, up from 49.9 in December.
This is the first time since June 2022 that the index has exceeded 50, the dividing line between expansion and contraction.
“Korea's manufacturing health recorded another improvement in early 2024,” said Osama Bhatti, economist at S&P Global Market Intelligence.
“Production, new orders and exports all returned to growth, while purchasing expanded sharply.”
Production and new orders rose in January after declining for 20 and 18 months, respectively, the sub-index showed.
Amid an increase in orders, finished product inventories decreased significantly for the first time in five months, but purchase volumes increased to the highest level since April 2022.
New export orders in particular increased for the first time since July 2023 and at the fastest pace since February 2022 due to improved demand for industrial products from key markets such as the United States and mainland China, according to the survey.
Asia's fourth-largest economy grew at its slowest pace in three years in 2023, data showed last week, amid a slump in exports, although exports are expected to recover towards the end of the year. It is expected to improve further in 2024 and drive strong growth.
In the survey, manufacturers also cited raw material price pressures and logistics disruptions due to the Red Sea unrest, with input price increases accelerating in January for the first time in three months and supplier delivery times worsening over the past six months. ing. line.
Hopes for a domestic and global economic recovery supported business confidence, with manufacturing optimism about future output reaching its highest level since August 2023. – Reuters
