SEOUL, March 3 (Reuters) – South Korea’s factory activity expanded for a third straight month in February, as output increased at the fastest pace in one-and-a-half years driven by strong chip demand, a private-sector survey showed on Tuesday.
The purchasing managers index (PMI) for manufacturers in Asia’s fourth-largest economy, published by S&P Global, stood at 51.1 in February, marginally down from 51.2 in January – the highest since August 2024.
It was the third consecutive month the index stood above the 50-mark separating expansion from contraction.
Output grew at the strongest pace since August 2024, while new orders rose for a third straight month, although the increase was slightly slower than the month before, sub-indexes showed.
“Output and new orders remained in expansion territory, with firms highlighting strength in the semiconductor market,” said Usamah Bhatti, economist at S&P Global Market Intelligence.
External demand was particularly strong in the United States and China, according to the survey.
South Korea’s exports extended their growth streak to a ninth month in February, beating market expectations, as strong chip sales continued to underpin overall shipments even as uncertainties regarding U.S. tariffs cloud the outlook, trade data showed on Sunday.
Last week, the Bank of Korea raised its economic growth forecast for this year to 2.0% from 1.8%, citing a chip boom in exports, as the central bank held interest rates steady and signalled policy would stay unchanged for the next six months.
Other near-term indicators in the survey also pointed to stronger demand, with input purchases rising by the most since July 2021 and backlogs of work increasing by the most in 13 months.
Post-production inventories rose for the first time since December 2024, as firms looked to build inventories to keep pace with increasing demand.
(Reporting by Jihoon Lee; Editing by Jacqueline Wong)
Comments