South Korea Manufacturing Growth Slows in June

The S&P Global South Korea Manufacturing PMI eased to 52.1 in June 2026 from 54.8 in May, marking the softest expansion in four months. Output and new orders continued to grow, though at their weakest pace of 2026, as higher raw material costs, supply shortages, and the impact of the Middle East conflict weighed on demand and production. Export orders declined for a second consecutive month, while backlogs of work rose at the fastest pace in just over four years amid delivery delays and a renewed decline in employment. Purchasing activity also moderated, although firms increased pre-production inventories at the fastest pace since November 2024 to mitigate supply disruptions. On the price front, input cost inflation remained elevated, driven by higher raw material prices and a weaker won, prompting manufacturers to continue raising selling prices. Meanwhile, business confidence fell to a seven-month low amid concerns over the domestic economy and persistently high prices.

The S&P Global South Korea Manufacturing PMI rose to 54.8 in May 2026 from 53.6 in April, marking the strongest expansion since March 2021. Output and new orders grew at their fastest pace in around five years, supported by stronger domestic demand and inventory-building efforts as firms sought to guard against rising costs linked to the Middle East war. Production growth also hit a five-year high, while purchasing activity increased at the quickest rate since July 2021. Stronger demand encouraged manufacturers to expand payrolls, with employment rising at the fastest pace since March 2013, while backlogs increased for a fifth straight month. However, delivery times lengthened further amid raw material shortages and disruptions. Input cost inflation remained near April’s record high, driven by higher raw material, oil prices and a weaker currency, while selling-price inflation stayed among the highest in the survey’s history. Lastly, business confidence improved to a three-month high.

The S&P Global South Korea Manufacturing PMI rose to 53.6 in April 2026 from 52.6 in March, marking the strongest expansion since February 2022. Output and new orders accelerated, driven by new product launches and client stockpiling. Export demand also edged higher, supported in part by easing US tariff-related disruptions. Production grew at the fastest pace in 20 months, while firms continued to increase purchasing activity to secure inputs. Employment also continued to rise, while backlogs increased further. However, material shortages led to further declines in input inventories. On prices, input costs and output charges surged at record rates since April 2004, driven by higher raw material, oil, and fuel prices and supply disruptions linked to the Middle East conflict. Supplier delivery times worsened to the greatest extent since June 2022, while finished goods inventories fell sharply. Looking ahead, business confidence dropped to a five-month low.