SEOUL : South Korea’s factory activity grew at the sharpest pace in eight months in February, supported by strong demand, but manufacturers face persistent supply chain woes and inflationary pressures, a private-sector survey showed on Wednesday.
The IHS Markit purchasing managers’ index (PMI) jumped to 53.8 in February from 52.8 in December, remaining above the 50-point threshold that indicates expansion in activity for a 17th straight month.
“February data provided evidence that the South Korean manufacturing sector remained robust despite the surge in COVID-19 cases related to the Omicron variant,” said Usamah Bhatti, an economist at IHS Markit.
New export orders grew at their sharpest pace since April last year, with solid demand from the country’s major trading partners United States, Europe and China.
Output also expanded for a second month and at the fastest pace in seven months, thanks to increased new orders, especially in the electronic and automotive sectors.
To meet rising output, manufacturers were seen raising staffing levels for a third month and at the fastest pace in 11 months.
Still, the recovery was held back by quicker inflation in raw materials, notably in oil and metals, on continued supply chain disruption, also pushing up the factory gate inflation to the fastest pace on record.
“The impact of shortages has been clear in rising raw material prices, which is now feeding into prices charged for manufactured goods,” Bhatti said.
That said, firms were strongly optimistic over the coming year, with the degree of confidence rising to the highest in 12 months, on hopes of easing of supply chain disruption and pent-up demand from the coronavirus pandemic to drive global factory revival.
(Reporting by Joori Roh; Editing by Sam Holmes)
For all the latest business News Click Here
