| Actual | Previous | |
|---|---|---|
| Index | 49.0 | 50.6 |
Highlights
South Korea's manufacturing activity slipped back into contraction in December, hit by weaker new orders and higher costs, after posting its first expansion in three months in November. The purchasing managers index for the sector stood at 49.0, below the neutral line of 50 for the third time in four months, after rising to 50.6 in November from a 13-month low of 48.3 in October.
The sector outlook for 2025 is clouded by sluggish domestic demand and concerns over the new U.S. administration's possibly protectionist trade policy. S&P Global, which compiled the Korean PMI, noted that the sentiment among the sector is the worst since the middle of 2020, and that excluding the pandemic period, it is the lowest since data for future output was first collect in 2012.
At its latest meeting on Nov. 28, the Bank of Korea lowered its policy interest rate by another 25 basis points to 3.00% in response to cooling inflation after reducing by 25 basis points to 3.25% in October. It had left it at a restrictive level of 3.50% for 13th consecutive meetings. The BOK's next rate-setting meeting is slated for Jan. 16.
The sector outlook for 2025 is clouded by sluggish domestic demand and concerns over the new U.S. administration's possibly protectionist trade policy. S&P Global, which compiled the Korean PMI, noted that the sentiment among the sector is the worst since the middle of 2020, and that excluding the pandemic period, it is the lowest since data for future output was first collect in 2012.
At its latest meeting on Nov. 28, the Bank of Korea lowered its policy interest rate by another 25 basis points to 3.00% in response to cooling inflation after reducing by 25 basis points to 3.25% in October. It had left it at a restrictive level of 3.50% for 13th consecutive meetings. The BOK's next rate-setting meeting is slated for Jan. 16.
Definition
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.
Description
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.
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.
