SEOUL: South Korea’s factory activity expanded marginally in January, with production rising for the first time in five months on robust overseas demand, a private-sector survey showed on Monday (Jan 3).
The purchasing managers index (PMI) for manufacturers in Asia’s fourth-largest economy, compiled by S&P Global, rose to 50.3 in January, topping the 50-mark that separates expansion from contraction, from 49.0 in December, when business sentiment was hit by domestic political turmoil.
South Korea’s economy barely grew in the fourth quarter of 2024, as a political crisis sparked by President Yoon Suk Yeol’s short-lived Dec 3 martial law bid hurt already frail consumption.
Last month, output rose for the first time since August, thanks to accelerated growth in new export orders, despite sluggish domestic demand, sub-indexes showed.
Improvements in overseas demand, particularly in major markets across North America, Europe and Asia, saw backlogs of works rise at the quickest pace since June 2022, while input purchases increased at the fastest rate in five months.
The survey result contrasts with monthly trade data released on Saturday, which showed exports falling for the first time in 16 months in the wake of uncertainty over US tariff policies.
On the inflation front, input prices rose at the fastest rate since July 2022 due to a weak won, which fell more than 12 per cent last year to become the worst performer among major Asian currencies. That contributed to inflation in output price also picking up pace to the fastest in 14 months.
South Korean manufacturers’ outlook for the year ahead turned more optimistic, although some firms remained worried about domestic economic conditions.
