SEOUL- South Korea’s factory activity shrank for an eighth straight month in November but there were some signs that the prolonged downturn may be easing, a private business survey showed on Monday.
The Nikkei/Markit purchasing managers’ index (PMI) in November rose to 49.4, from 48.4 in October.
It remained slightly below the 50-point level that separates growth from contraction, but was the highest reading since April, when it marginally stood above the threshold at 50.2.
Manufacturing output continued to shrink, but at a much milder pace as new product launches gave a lift to auto and electronics makers and their suppliers, the survey showed.
Total new orders contracted more than a month earlier, extending the streak into a 13th month amid sluggish domestic and global demand.
But the sub-index for new export orders improved to 49.9, from 48.6 in October, and was just a notch below the neutral level.
Sales to China, Vietnam and the Americas increased, but the index still marked its 15th decline in the past 16 months. Panelists reported weaker sales in Japan, India and Hong Kong.
“Although new orders continued to drop, declines in October and November were notably softer than seen over the first three quarters of the year,” said Joe Hayes, economist at IHS Markit.
“Overall, the PMIs for October and November suggest that firms are starting to build momentum as we head into 2020,” Hayes added.
The pace of job losses also moderated, though firms continued to reduce staff levels to cut costs.However, Bank of Korea Governor Lee Ju-yeol said on Friday that growth momentum in 2020 would be far from strong. The bank held its policy interest rate unchanged at 1.25 percent, while slashing its growth and inflation projections, underlining a cautious view on the economy. – Reuters