Korea's July Manufacturing PMI at 46.9... "Below 50 but Rising for Two Consecutive Months"

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Last month, South Korea's manufacturing sector remained subdued due to the impact of the novel coronavirus disease (COVID-19), but it showed signs of recovery by rebounding for the second consecutive month since hitting a low in May.

According to Bloomberg and other sources on the 3rd, market research firm IHS Markit announced that South Korea's July Manufacturing Purchasing Managers' Index (PMI) rose by 3.5 points from the previous month (43.4) to 46.9. Accordingly, South Korea's manufacturing PMI increased for two consecutive months from the low of 41.3 in May to 45.7 in June and 46.9 in July.

The PMI is an indicator that gauges economic trends by surveying purchasing managers on new orders, production, employment, inventories, and more. A PMI above 50 indicates economic expansion, while below 50 indicates contraction. Joe Hayes, an economist at IHS Markit, explained, "The July data shows early signs that South Korea's manufacturing sector is turning toward recovery as global supply chains resume and demand in key areas such as automobile production gradually recovers."

IHS Markit reported that in July, the decline in new orders and production in South Korea's manufacturing sector slowed, but the pace of finished goods inventory increase was the fastest since January 2009 due to below-expectation demand and some delivery delays. IHS Markit views exports, which account for 40% of South Korea's economy, as a key factor.

The manufacturing conditions in other Asian countries announced by IHS Markit on the same day showed mixed movements by country. Taiwan's PMI rose above 50 to 50.6 for the first time in four months, showing expansion, and Indonesia's PMI increased from 39.1 in June to 46.9 in July. Japan and Thailand also saw their PMIs rise from 40.1 to 45.2 and 43.5 to 45.9, respectively. However, Vietnam's PMI fell from 51.1 to 47.6, shifting from expansion to contraction, and the Philippines and Malaysia also declined from 49.7 and 51.0 to 48.4 and 50.0, respectively.

This content was produced with the assistance of AI translation services.