| Actual | Previous | |
| Index | 53.1 | 52.1 |
Highlights
South Korea's manufacturing PMI showed stronger conditions in the sector in July, with the survey's headline index increasing to 53.1 from 52.1 in June from 54.8 in May. Respondents again reported higher costs and supply delays due to the Iran conflict but new orders and output were boosted by strong demand for semiconductors and automobiles.
Survey respondents reported stronger increases in output and new orders, while new export orders were reported to have risen after two consecutive declines. Respondents also reported a small increase in payrolls while the survey's measure of business confidence picked up from a seven-month low. Respondents also reported that input costs and selling prices rose at the slowest pace since February and April respectively.
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.