South Korea factory activity picks up on strong Asia demand, PMI shows
2024.12.01 19:59
By Jihoon Lee
SEOUL (Reuters) – South Korea’s factory activity rose in November, after two straight months of declines, thanks to improving demand in Asia, a private sector survey showed on Monday.
The purchasing managers index (PMI) for manufacturers in Asia’s fourth-largest economy, compiled by S&P Global, rose to 50.6 in November, above the 50 mark that separates expansion from contraction and 48.3 in October.
“November PMI data signalled that the South Korean manufacturing sector saw a renewed improvement in operating conditions,” said Usamah Bhatti, economist at S&P Global Market Intelligence.
“Firms were particularly buoyed by international demand.”
New orders rose for the first time in three months, with new export orders growing at the fastest pace since July. Output fell but the decline was milder than the month before.
In the survey, manufacturers noted new contract wins and orders for new products from abroad, particularly from major markets across the Asia-Pacific region.
Economic activity has been improving in China recently with Beijing rolling out stimulus measures as it braces for the second term of U.S. President-elect Donald Trump, who has vowed more tariffs against China.
South Korea last week delivered a surprise interest rate cut and signalled more to come, as policymakers turned a wary eye to trade risks from a second Trump presidency.
The rebound in export demand last month pressured production capacity, with backlogs of work rising for the first time in five months and at the fastest rate since June 2022, while stocks of raw materials and semi-finished goods jumped the most in 14 months.
Manufacturers’ optimism for the year ahead improved to a three-month high, as firms hoped for continued growth in new product orders and improvements in domestic conditions.
