The S&P Global South Korea Manufacturing PMI edged down to 52.1 in June 2026 from 54.8 in May, signaling the slowest pace of expansion in four months. Both output and new orders continued to rise, but at their weakest rates so far this year, as higher raw material costs, supply shortages, and the ongoing conflict in the Middle East weighed on demand and production. Export orders fell for the second month in a row, while backlogs of work increased at the fastest rate in just over four years, reflecting delivery delays and a renewed decline in employment. Purchasing activity also softened, although firms built up pre-production inventories at the quickest pace since November 2024 in an effort to safeguard against supply disruptions.
On the price front, input cost inflation remained elevated, driven by higher raw material prices and a weaker won, leading manufacturers to continue raising their selling prices. Meanwhile, business sentiment deteriorated to a seven-month low amid growing concerns about the domestic economic outlook and persistently high inflation.
