South Korea is often referred to a bellwether for the global economy.
The latest PMI report, Markit/IHS, paints a picture of sustained improvement in the manufacturing sector. Comments from the Markit analysts:
- “South Korean firms recorded further increases in both output and new orders in the latest survey period, as businesses reported improved demand, particularly in the technology sector. External demand also rose at a solid pace in April, driven by recoveries in Asia and North America.
- “Outstanding business rose at the fastest pace for 11 years in April, with the additional pressure on capacity encouraging firms to expand workforce numbers for the second month running.
- “South Korean goods producers remained optimistic in their outlook for activity over the coming year. Firms were hopeful that a wider economic recovery would drive demand for newly launched products in both domestic and external markets. IHS Markit currently estimates industrial production will expand by 5.5% in 2021.”
A positive indication. Supply chain constraints, demand increasing …. this is raising questions on the tenability of inflation being ‘transient’.