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Activity in South Korea’s manufacturing sector contracted for a seventh consecutive month in February as both domestic and external demand remained lacklustre.

The Nikkei-Markit manufacturing purchasing managers’ index for South Korea came in at 49.2 last month, still below the 50-point line separating contraction from expansion.

Despite the headline figure edging up slightly from January’s reading of 49, new orders shrank at a faster pace than the previous month as orders from abroad fell into contraction after two months of growth. Output remained in contraction, though it shrank at the slowest pace to date in the current seven-month run.

Companies surveyed for the gauge reported a sixth straight month of job cuts, while inflation in both input and output prices eased back from recent peaks. Input costs were bolstered by unfavourable movements in the won’s exchange rate, while prices charged to clients were driven up by higher raw materials prices.

Markit economist Samuel Agass said there was little positive news on the sector’s health from the latest survey:

Firms continue to lower their buying activity and are maintaining current stock reduction policies, and with workforce numbers also declining, goods producers appear to be positioning themselves to best cope with a substantial period of weakness over at least the next few months.

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