SEOUL – South Korea’s factory activity expanded in January for the first time in 19 months as output and orders returned to growth on improving demand in key export markets, a private-sector survey showed on Feb 1.
The purchasing managers index (PMI) for South Korean manufacturers, compiled by S&P Global, stood at 51.2 in January on a seasonally adjusted basis, up from 49.9 in December.
It was the first time since June 2022 the index rose above the 50-mark, which separates expansion from contraction.
“The health of the South Korean manufacturing sector registered a renewed improvement at the start of 2024,” said Mr Usamah Bhatti, an economist at S&P Global Market Intelligence.
“Output, new orders and exports all returned to growth, while there was a sharper expansion in purchasing.”
Output and new orders rose in January after falling for 20 months and 18 months, respectively, sub-indexes showed.
Amid growing orders, stocks of finished goods were reduced by the most in five months, while the quantity of purchases rose by the most since April 2022.
New export orders, especially, rose for the first time since July 2023 and by the fastest pace since February 2022 on improved demand for manufactured goods from key markets, such as the United States and mainland China, according to the survey.
Asia’s fourth-largest economy grew at the slowest pace in three years in 2023, data showed last week, amid sluggish exports, which started to recover towards the end of the year and are expected to improve further in 2024 to drive stronger growth.
In the survey, manufacturers also noted raw material price pressures and logistics disruptions due to unrest in the Red Sea, with the rise in input prices accelerating in January for the first time in three months and suppliers’ delivery times worsening for the sixth month in a row.
Manufacturers’ optimism for future output hit the highest level since August 2023 as hopes of a domestic and global economic recovery supported business confidence. REUTERS