| Actual | Previous | |
| Index | 54.8 | 53.6 |
Highlights
South Korea's manufacturing PMI showed stronger conditions in the sector in May, with the survey's headline index increasing to 54.8 from 53.6 in April. This is the highest level for the index since March 2021. Respondents again reported higher costs and supply delays due to the Iran conflict and, for the second month in a row, cautioned that increased production partly reflects precautionary stockpiling motivated by concerns about potential further disruptions and cost increases.
Survey respondents reported the strongest increase in output in more than five years and further growth in new orders, but new export orders were reported to have fallen for the first time since November. Respondents reported a third consecutive increase in payrolls while the survey's measure of business confidence picked up from a five-month low. Respondents also reported that input costs and selling prices both rose at a pace close to record highs since the survey was initiated in 2004.
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.