The manufacturing sector in South Korea contracted at a faster pace in April, the latest survey from Markit Economics showed on Monday, with a six-month low PMI score of 48.8.
That’s down from 49.6 in March, and it moves further beneath the boom-or-bust level of 50 that separates expansion from contraction.
“Latest data signaled worsening operating conditions in the South Korean manufacturing sector. Both production and new orders contracted for the second straight month, with reports of an unstable domestic economy leading to poor demand conditions,” said Markit economist Amy Brownbill.
New orders declined for the second straight month, alongside a fall in production. Subsequently, manufacturers reduced their staffing levels in April, marking the end of a four-month period of growth. Meanwhile, downward pressures on both input and output prices were evident in April.
Manufacturing production contracted for the second month running in April. The rate of decrease was modest overall, but nevertheless faster than the average over the past 12 months.
Subsequently, new orders from abroad declined in April and at the quickest rate since October 2014. Firms linked the latest decrease to poor market conditions, with some commenting on reduced trade volumes with Europe and Russia.
Reflecting worsening operating conditions, employment levels at South Korean goods producers decreased for the first time this year in April. Although fractional, the latest fall was only the third in the past year-and-a-half.
In line with falls in both output and new orders, buying activity at South Korean manufacturers declined for the second consecutive month in April, although at only a slight pace.
On the prices front, input prices continued to fall, although at a slower rate than the previous month. Reports of cheaper raw material costs were commonly cited as the main factor behind the latest decline.
“Employment levels declined for the first time this year. Meanwhile, reports of cheaper raw material costs led to a further decline in input prices, while manufacturing charges declined at the fastest rate in over six years,” Brownbill said.
The material has been provided by InstaForex Company – www.instaforex.com