SEOUL : South Korea’s factory activity weakened at a faster pace in August, extending its longest-ever slump by another month as export orders fell again, a private business survey showed on Friday.
The purchasing managers index (PMI) for South Korean manufacturers, compiled by S&P Global, stood at 48.9 in August on a seasonally adjusted basis, down from a 12-month high of 49.4 in July.
The sub-50 reading meant activity contracted for the 14th straight month, the longest downturn in the survey’s history stretching back to April 2004.
Sub-indexes showed new export orders swung back to contraction, after their first increase in 17 months in July, keeping overall orders and output in contractionary territory for 14 months and 16 months, respectively.
In August, worries intensified over slowing economic growth in China, which had already been dragging down South Korea’s exports amid weak demand.
“August PMI data signalled that South Korea’s manufacturing sector saw a sustained deterioration in operating conditions,” said Trevor Balchin, Economics Director at S&P Global Market Intelligence.
“The current downturns in output and new work are the longest in the survey history, although much less severe than those registered during the pandemic and global financial crisis.”
On the inflation front, input prices rose again, after falling in July for the first time in more than three years. Still, output prices extended decline to a fourth straight month due to competitive pressures and client negotiations.
Suppliers’ delivery times worsened for the first time in five months, as firms reported shipping delays and shortages of semiconductors in particular.
Still, stocks of finished goods fell at the fastest rate since December 2021, while backlogs of work declined at the slowest in nine months.
A measure of manufacturers’ optimism for future output climbed to the highest level since June 2022, signalling some hope of a recovery in demand.
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