S.Korea factory jobs in March as domestic weakness drags, PMI shows

By Jihoon Lee

SEOUL (Reuters) – South Korean manufacturing activity weakened in March as weak domestic demand offset strong exports, a private sector survey showed on Monday.

The Purchasing managers index (PMI) for manufacturers in the fourth largest economy in Asia, produced by S&P Global, stood at 49.8 in Marchon according to the season, down from 50.7 in February.

The fall below the 50-mark, which separates expansion from consensus, was the first in three months, with the sub-indexes for output and new orders falling to 49.8 and 49.9, respectively.

“The PMI data for March shows that South Korea’s manufacturing industry has also seen a deterioration in operating conditions. Both output and new plans fell, as companies said that weak demand and the instability of the domestic economy hindered production and sales,” said Usamah Bhatti, an analyst at finance on . S&P Global Market Intelligence.

“One bright spot, however, was demand for exports for the third month in a row and at a higher rate.”

The survey showed that imports have grown in Southeast Asia, North America and Japan. The findings are in line with government sales in South Korea, which have risen since October due to chip-led demand.

However, domestic demand has been slowing as interest rates remain high for a long time, raising concerns about inflation.

Producers’ finished goods and purchases fell sharply from December 2021 and April 2020, respectively, driven by companies’ efforts to cut prices to save money.

However, South Korean manufacturers were optimistic about the future on the prospect of improved interest rates, particularly in the semiconductor and automotive sectors, as well as the recovery of the economy.

(Reporting by Jihoon Lee. Editing by Shri Navaratnam)

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