In a sign of softening industrial activity, South Korea’s Manufacturing Purchasing Managers' Index (PMI) slipped to 49.9 in February 2025, down from 50.3 in January. The updated figures, released on March 4th, indicate a shift into contraction territory for South Korea’s manufacturing sector, after a month of marginal growth.
The PMI, an influential indicator that gauges the economic health of the manufacturing sector, suggests that the industry is experiencing slight contraction when the index falls below the neutral mark of 50. Prior to this shift, the sector had been holding steady at 50.3, signaling expansion.
Economists and investors will be closely monitoring this decline, as it could indicate broader economic challenges for the nation. The drop in PMI could be reflective of both domestic and international market pressures, suggesting that manufacturers may be navigating a more challenging environment moving forward. As South Korea is a significant exporter, these numbers may also reverberate through global supply chains, impacting trade balances.
