South Korea factory activity accelerates in April, cost pressures continue

Staff labour on metal frames at a development website in central Seoul, South Korea, August 29, 2016. REUTERS/Kim Hong-Ji

SEOUL, Might 2 (Reuters) – South Korea’s manufacturing unit exercise accelerated in April, however price pressures because of the Ukraine disaster and China’s strict lockdown measures continued to weigh closely on producers, a private-sector survey confirmed on Monday.

The S&P International buying managers’ index (PMI) rose to 52.1 in April from 51.2 in March, standing above the 50-mark threshold for the nineteenth straight month that signifies enlargement in exercise.

Output returned to enlargement after shrinking in March, with new orders rising at a quicker tempo, although these for exports continued to lower.

Producers had been seen constructing enter shares amid ongoing provide chain disruptions and excessive inflationary pressures, whereas passing greater prices onto clients.

Output costs rose at a document tempo within the survey’s 18-year historical past, whereas enter costs rose on the quickest tempo in 5 months. Shares of purchases additionally elevated by probably the most in a yr.

“Value and provide pressures had been exacerbated by the continued conflict in Ukraine and the re-imposition of strict COVID-19 restrictions throughout China, each of which stifled export orders partly attributable to port congestion and an absence of accessible containers,” mentioned Usamah Bhatti, economist at S&P International.

“As a part of efforts to guard themselves from future disruption and better price burdens, producers appeared to extend and retailer further shares of uncooked supplies and semi-finished items.”

Manufacturing companies remained optimistic over the approaching yr for output, however the stage of constructive sentiment fell to the bottom since December 2021.

Reporting by Jihoon Lee; Enhancing by Sam Holmes

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