South Korea Manufacturing Shrinks for 2nd Month

The S&P Global South Korea Manufacturing PMI rose to 51.2 in January 2026 from 50.1 in December, reaching its highest level since August 2024 as the health of the manufacturing sector strengthened. Three of the PMI’s five components contributed positively in January, including new orders, output and suppliers’ delivery times, while employment and stocks of purchases showed slight negative influences. Demand for South Korean goods picked up at the start of 2026, with Mainland China, North America and Europe all cited as sources of growth. The sustained increase in new orders supported renewed production growth in January, only the second gain in the past 11 months. The 12-month outlook also improved to the highest since May 2022 as manufacturers anticipated new product lines, diversification and expanded capacity to drive growth. Inflationary pressures, however, persisted, likely fueled by a weak exchange rate and higher metals prices.

The S&P Global South Korea Manufacturing PMI increased to 50.1 in December 2025, up from 49.4 in November. It marked the first expansion in the sector in three months and the fastest pace since September, as new orders rose for the first time in three months and recorded their steepest increase since November 2024. New export orders also returned to expansion territory for the first time since September, due to improved demand. Employment rose, while purchasing activity climbed for the first time since September and at the fastest pace since August 2024. Meanwhile, output continued to decline, albeit at a softer pace than in November. On prices, input cost inflation accelerated to its highest level since July 2022, amid higher raw material prices and unfavourable exchange-rate fluctuations. As a result, output cost inflation rose to a nine-month high. Finally, sentiment strengthened to its highest level since May 2022, driven by hopes of higher sales, supported by new product launches.

The S&P Global South Korea Manufacturing PMI stood at 49.4 in November 2025, unchanged from October. It marked the second consecutive month of contraction in the sector, as both output and new order intakes fell for the second straight month, with notable weakness observed in domestic demand. Manufacturers recorded a sustained reduction in foreign demand, although the rate of decline was only fractional. Employment fell for the second straight month amid lower production, while backlogs of work fell for the seventh time in the past eight months. Meanwhile, purchasing activity was unchanged, and delivery times lengthened to the greatest extent in four months. On prices, input cost inflation accelerated to a nine-month high due to higher raw material prices and unfavourable exchange rate movements. Meanwhile, output prices fell for the first time in a year as firms sought to drive sales and remain price-competitive. Finally, sentiment eased and remained well below the series average.