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© Reuters. FILE PHOTO: A factory is seen in Incheon, South Korea, May 30, 2016. REUTERS/Kim Hong-Ji/File Photo
SEOUL (Reuters) – South Korea’s factory activity contracted for a sixth straight month in December as a global economic slowdown and a local truckers’ strike led to the worst decline in demand in 2-1/2 years, a business survey showed on Monday. .
The S&P Global (NYSE: ) purchasing managers’ index (PMI) for South Korea manufacturers fell to 48.2 last month from 49.0 in November.
It fell back after two months of slight gains from a more than two-year low of 47.3 reached in September, but remained below the 50 that separates expansion from contraction for the sixth consecutive month.
Sub-indices showed output contracted for the eighth month in a row, new orders fell for a sixth month, and new export orders contracted for a 10th month.
In particular, new orders have fallen at the fastest pace since June 2020, both overall orders and exports, while input purchases and work backlogs have also fallen at the fastest pace in about 2-1/2 years.
Meanwhile, as South Korean truckers went on strike for the second time in 2022, supplier delivery times were at their worst since June.
“The December PMI data provided further evidence that South Korean manufacturing companies continue to struggle in the face of the current global economic downturn,” said Laura Denman, economist at S&P Global Market Intelligence.
“Lower customer demand both domestically and internationally was central to the recent deterioration.”
On inflation, input prices rose at the slowest pace since January 2021, while the pace of output price increases slowed significantly to the weakest of their 27-month rising streak.
The confidence level, which is just above the neutral range and the lowest level since July 2020, suggests that producers are not very optimistic about future production in the coming year.
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