SEOUL, November 2 (AJP) — South Korea's manufacturing sector growth stretching for an 11th consecutive month in October slowed to its weakest pace in six months as output and new orders lost momentum, a private survey showed Monday.
The seasonally adjusted S&P Global South Korea Manufacturing Purchasing Managers' Index (PMI) fell to 51.3 in October from 53.9 in September, S&P Global said.
A reading above 50 indicates an improvement in manufacturing conditions from the previous month, while a reading below 50 signals deterioration.
Production increased for a 10th consecutive month, supported by sustained semiconductor demand, but the pace slowed to the weakest in that sequence. Manufacturers cited softer new orders, high prices and shortages of raw materials as constraints on production.
New orders also rose at the slowest pace since June, with some manufacturers reporting weaker demand from the automotive sector.
External demand showed a similar slowdown. New export orders increased only marginally, marking the weakest expansion in the current four-month sequence, although Asia-Pacific markets continued to provide support.
Manufacturers cut employment for the first time in four months as the pace of new business growth eased. Backlogs of work continued to increase, but at the slowest rate in seven months.
Purchasing activity also lost momentum, while pre-production inventories fell at the fastest pace since April 2020 amid raw material shortages and efforts by companies to reduce stocks.
Supply constraints persisted, with shipping delays and shortages leading to the sharpest lengthening of suppliers' delivery times in four months.
Cost pressures remained elevated. Input prices rose sharply on higher raw material costs, while some companies said an unfavorable exchange rate had raised the cost of imported inputs.
Manufacturers raised selling prices at the slowest pace in 11 months as some absorbed higher costs to remain competitive.
"The positive demand momentum seen across South Korean manufacturing in the third quarter began to falter" at the start of the fourth quarter, said Usamah Bhatti, economist at S&P Global Market Intelligence.
Bhatti said slower demand, raw material shortages and high costs weighed on performance, although manufacturers remained optimistic about the year ahead on expectations for new product launches and continued strength in semiconductor demand.
The survey was conducted between Oct. 12 and Oct. 22 among a panel of around 400 South Korean manufacturers.
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