Key insights
- South Korean factory activity expanded at its fastest pace in four years, driven by domestic demand and semiconductors. While U.S. demand remains strong, export order growth slowed due to the Middle East war. Rising input costs, fueled by higher oil prices and a weak won, could signal inflationary pressures, potentially impacting future monetary policy and global growth outlook.
SEOUL, April 1 (Reuters) - South Korea’s factory activity expanded at the strongest pace in more than four years in March, led by semiconductor demand and new product launches, even as the Middle East war dragged on overseas orders, a private-sector survey showed on Wednesday.
Here are some details: * The purchasing managers index (PMI), published by S&PGlobal, stood at 52.6, up from 51.1 in the previous month andthe highest since February 2022. * Output rose the most since August 2024 on new products andsemiconductors. * "Anecdotal evidence suggested that a strengtheningdomestic economy and new product launches were behind the latestexpansion in the manufacturing sector," said Usamah Batti,economist at S&P Global Market Intelligence. * New orders expanded at a slightly slower rate than themonth before, as the Middle East war drove export order growthto a four-month low despite strong demand in the U.S. and Asia. * Input prices rose at the sharpest pace since June 2022 ona surge in oil prices and a weak won.