South Korea Manufacturing Growth Eases in August

The S&P Global South Korea Manufacturing PMI fell to 52.3 in August 2026 from 53.1 in July, signaling a modest but still above-average expansion in the manufacturing sector. Output and new orders increased for the eighth and ninth consecutive months, respectively, although the pace of growth softened. Export orders rose at the fastest pace since November 2020, supported by stronger demand from major trading partners across Asia, Europe and North America. Employment increased for the fifth time in six months, while material shortages and supply chain disruptions continued to constrain production and push backlogs higher. Meanwhile, input cost inflation eased for a fourth straight month to its slowest pace since November 2025, while output price inflation fell to a seven-month low. Business confidence also improved to a three-month high, with firms citing bullish sales expectations and opportunities arising from new technology products and services.

The S&P Global South Korea Manufacturing PMI rose to 53.1 in July 2026 from 52.1 in June, signaling the third-strongest expansion in the past four years. Output and new orders grew at a faster pace, supported by stronger demand, particularly from the semiconductor and automotive sectors, while export orders increased for the first time in three months and at the fastest rate since April 2021. Employment rose for the fourth time in five months as firms expanded production, while purchasing activity remained solid despite ongoing supplier delays linked to the Middle East conflict. Input buying and pre-production inventories also increased as manufacturers sought to guard against further cost pressures and supply disruptions. Meanwhile, input cost inflation eased to its slowest pace since before the outbreak of the war, allowing firms to moderate increases in selling prices, while business confidence strengthened on expectations of sustained order growth and new product launches.

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.