\n<\/p>\n
By Jihoon Lee<\/p>\n
SEOUL (Reuters) – South Korea’s factory activity contracted again in April, but manufacturers’ optimism climbed to the highest level in nearly two years as output and orders managed to post marginal growth, a private-sector survey showed on Thursday.<\/p>\n
The purchasing managers index (PMI) for manufacturers in Asia’s fourth-largest economy, compiled by S&P Global, fell to 49.4 in April, from 49.8 in March, on a seasonally adjusted basis.<\/p>\n
It was the second month that the index had dipped below the 50-mark, which separates expansion from contraction, and the lowest reading since August 2023.<\/p>\n
“While output and new orders returned to fractional growth territory, the headline PMI was weighed down by falling employment and stocks of purchases,” said Usamah Bhatti, economist at S&P Global Market Intelligence.<\/p>\n
“Falling employment, backlogs and inventories suggest that the sector still has some way to go before growth can be sustained.”<\/p>\n
The South Korean economy grew at the fastest pace in more than two years in the first quarter, data showed last week, beating all estimates on the back of a pick-up in domestic consumption and robust exports.<\/p>\n
In the manufacturing survey, sub-indexes for output and new orders rose in April to 50.1 and 50.3, respectively, after falling below 50 in March for the first time in three months.<\/p>\n
New export orders grew for the fourth straight month in April on strong demand from mainland China and the wider Asia-Pacific region, but the pace was a bit slower than the prior month, the survey showed.<\/p>\n
On a negative note, employment fell in April after 11 months of increases, while inflation in both input and output prices were the sharpest since November.<\/p>\n
Even so, manufacturers’ optimism for the year ahead logged the highest reading since May 2022, as firms hoped for a sustained recovery in domestic and export orders, aided by new product launches and lower interest rates.<\/p>\n
(Reporting by Jihoon Lee; Editing by Shri Navaratnam)<\/p>\n<\/div>\n