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Activity in South Korea’s manufacturing sector shrank in April, marking nine months of deterioration even as the pace of contraction eased to the slowest in the year so far, with exports dropping at the fastest pace since October amid tensions with key trading partner China.
The Nikkei-Markit manufacturing purchasing managers’ index came in at 49.4 in April, up a full point from a reading of 48.4 in March but still below the 50-point line separating expansion and contraction.
Output and new orders both fell from the previous month. Input prices rose again on growing raw materials costs, but prices charged to clients rose only marginally as clients pressured producers to minimise price changes.
New export orders fell for a third consecutive month, with companies surveyed reporting demand from China continued to fall in part due to geopolitical tensions related to Seoul’s deployment of a US missile defence system.
Companies cut employee numbers for the eighth month running, though more slowly than the eight-month record pace seen in March.
That persistent reported weakness in export demand seen in the survey – which is based on changes in conditions from a month prior – stands in contrast to the official figures from South Korea’s Ministry of Trade, Industry and Energy, which on Monday showed export growth had risen in year-on-year terms at the fastest pace in nearly six years.