SEOUL- Total new orders and export orders in South Korea both expanded but the pace of growth slightly eased from June as highly contagious Delta variant and related curbs weakened global demand.
South Korea’s factory activity grew for a 10th straight month in July, driven by a solid expansion in production and new orders, though supply-chain disruptions continued to add strains on manufacturers, with both input and output prices rising.
The IHS Markit purchasing managers’ index (PMI) for July stood at 53.0, slipping from 53.9 in June but holding above the 50-mark, which indicates an expansion in activity.
“South Korean manufacturers continued to report a sustained improvement in operating conditions at the start of the second half of the year as production levels continued to expand,” said Usamah Bhatti, economist at IHS Markit.
The sub-index for output stood at 53.5, marking the 11th consecutive month of expansion, and up from 53.3 a month earlier.
To meet the increased production, firms continued to raise staffing levels for another month, though the rate was the softest in five months.
“Anecdotal evidence suggested a resurgence in COVID-19 cases across Asia and ongoing supply chain disruption had led to demand easing in domestic and external markets,” Bhatti said.
Monday’s survey showed that raw material shortages and delivery delays continued, leading to a further increase in input prices. That also put firms under pressure to pass higher costs on to their clients.
