South Korea’s manufacturing activity weakened in March due to sluggish domestic demand despite strong overseas sales, according to a private survey reported by Reuters on Monday.
The Purchasing Managers Index (PMI) for manufacturers in South Korea dropped to 49.8 in March from 50.7 in February, marking the first decline in three months.
Output and new orders also decreased to 49.8 and 49.9, respectively.
The survey indicated that weak demand and a slow domestic economy hindered production and sales, although export demand continued to rise for the third consecutive month.
Export orders increased in Southeast Asia, North America, and Japan, aligning with the growth in South Korea’s overall exports driven by chip-led demand.
However, concerns remain about the pace of economic recovery as domestic demand weakens due to prolonged high interest rates.
Manufacturers are reducing inventory levels to cut costs, with stocks of finished goods and input purchases declining sharply.
Despite these challenges, South Korean manufacturers are optimistic about the future, anticipating sustained demand growth, especially in the semiconductor and automotive sectors, as well as a broader economic recovery.
