The S&P South Korea manufacturing PMI survey indicates that the sector has contracted for the sixth month in a row and at a more pronounced pace, with the survey's headline index falling from 49.0 in November to 48.2 in December. Respondents reported another month of weak demand from both domestic and foreign clients and ongoing concerns about the global economic outlook. They also noted, however, signs that inflationary pressures have eased.

Survey respondents reported sharper falls in output, new orders and new export orders in December but to a lesser extent than in November. Payrolls were also reported to have fallen for the fourth consecutive month, while the survey's measure of business confidence weakened further to its lowest level since September 2020. The survey suggests price pressures moderated in December, with its measure of input cost growth matching the lowest level in two years and respondents also reporting the smallest increase in selling prices in more than two years.

The Purchasing Managers' Manufacturing Index (PMI) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The Markit PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.