Economic IndicatorsTop News

South Korea’s June factory activity shrinks for sixth month: PMI

imageEconomy18 hours ago (Jun 30, 2020 08:40PM ET)

(C) Reuters. Hyundai Motor’s sedans are assembled at a factory of the carmaker in Asan

SEOUL (Reuters) – South Korea’s manufacturing activity extended declines in June as the coronavirus impact on global demand protracted, while uncertainty over the future development and economic recovery further weighed on business outlook.

The IHS Markit purchasing managers’ index (PMI) ticked up to 43.4 in June from 41.3 in May, but remained far below the 50-mark threshold that separates contraction from expansion for a sixth month.

The headline index reflected slower rates of contraction in major sub-indexes such as output, new orders and export orders but business conditions remained extremely weak in historical terms due to a long-feared resurgence in coronavirus infections.

“While the output and new orders indices have risen from the bottoms seen in April, these increases have been marginal as many companies are operating well below capacity or simply observing no month-to-month improvement in production and new order volumes,” IHS Markit economist Joe Hayes said.

Given the country’s high dependence on foreign trade – with exports making up 33% of 2019 nominal gross domestic product – a growing number of analysts downgraded their economic projections for South Korea this year, with the International Monetary Fund now seeing a 2.1% contraction.

Businesses were seen cutting staffing levels for a 14th consecutive month in June and at a similar rate seen in May, in response to weak sales and lower operating requirements.

Expectations for manufacturing output over the next 12 months also remained pessimistic, given uncertainty in COVID-19 development and potentially weak recovery.

“Given the cyclical nature of South Korea’s export-oriented economy, it appears the chances of a slow recovery from the COVID-19 economic shock are rising,” Hayes said.

“Without a sustained pickup in demand, manufacturing output levels will likely remain subdued.”

South Korea’s June factory activity shrinks for sixth month: PMI

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button
Close
Close
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!