South Korea Factory Activity Surges on Strong Export Demand

South Korea's factory activity accelerated in July, fueled by a surge in export demand, according to a recent survey.

The Purchasing Managers' Index (PMI), compiled by S&P Global, climbed to 53.1 in July from 52.1 in June. This marks the eighth consecutive month that the index has remained above the 50-point mark, which separates expansion from contraction in the manufacturing sector. The survey indicated that both production volumes and new orders grew at a quicker pace during the month.

Notably, new export orders saw their first increase in three months, reaching their steepest rate of growth since April 2021. This surge was particularly evident in the semiconductor and automotive industries, key sectors for Asia's fourth-largest economy. This export-driven growth follows a stronger-than-expected performance in the second quarter, where a semiconductor export boom offset a decline in construction investment.

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Both production volumes and new orders rose again, with particular strength seen in the semiconductor and automotive sectors.