The S&P Global South Korea manufacturing PMI's headline index rose from 47.8 in June to 49.4 in July, indicating that the sector contracted again, as it has for more than a year, but at a less pronounced pace. This is the index's highest level so far this year with some respondents reporting greater confidence that conditions are set to improve in coming months.

Survey respondents reported output and new orders fell only marginally in July, while new export orders were reported to have risen for the first time in more than a year, reflecting stronger demand from Europe and elsewhere in the region. Payrolls were reported to have been increased for the third consecutive month and at the fastest pace for more than a year, while the survey's measure of business confidence also increased to match its highest level since July 2022. Respondents reported input costs fell for the first time in more than two years in July and that they lowered selling prices at the fastest pace in nearly three 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.