South Korea’s manufacturing sector activity deteriorated for the sixth straight month in October, survey data from IHS Markit showed on Friday.
The Purchasing Managers’ Index increased to 48.4 in October from 48.0 in September. However any reading below 50 indicates contraction in the sector.
Production volumes were reduced by South Korean manufacturers, albeit slower than in the previous month.
New orders intake decreased in October and new business from foreign clients decreased after the brief stabilization.
The trade tensions between the US and China, and between Korea and Japan, were hindrances to export sales.
Business confidence improved to the highest level in sixteen months in October, but the level of optimism remaining weak relative to the long-run average.
“Latest survey data highlight the impact that difficult external conditions, which prompted the Bank of Korea into cutting rates, are having on the South Korean economy,” Joe Hayes, an economist at IHS Markit, said.
“A weak outlook and deflationary risks open the door for further policy easing,” Hayes added.
Separate data from the Statistics Korea showed that the consumer prices remained unchanged year-on-year in October, after a 0.4 percent decline in September. Economists had expected a decline of 0.3 percent.
On a monthly basis, consumer prices rose 0.2 percent in October, slower than the 0.4 percent increase in the previous month. Economists had expected the inflation to remain unchanged.
Excluding food and energy, core consumer prices rose to 0.2 percent annually in contrast to a 0.4 percent fall in September.