South Korea factory activity logs ninth straight month of expansion, PMI shows

South Korea’s factory sector extended its growth streak to nine months in August, supported by strong demand from overseas buyers.

S&P Global’s purchasing managers index stood at 52.3, down from 53.1 in July but still above the 50 mark that separates expansion from contraction. Manufacturers continued to report new orders, although the relevant sub-index eased to 53.5 from 54.8.

David Owen, an economist at S&P Global Market Intelligence, said export demand recorded its strongest increase since November 2020. He linked the performance to what he described as the current artificial intelligence and semiconductor supercycle.

South Korea’s economy grew faster than expected in the second quarter. A semiconductor export boom helped offset a decline in construction investment, according to the report.

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While August PMI data signaled an easing of overall new order growth across South Korean manufacturers, a robust increase in export demand, the strongest recorded since November 2020, is an encouraging sign that firms are still benefitting from the current AI and semiconductor supercycle.