South Korea June PMI factory gauge falls for 4th month to near 3-year low

A labourer works at the main factory of Hyundai Motor in Ulsan, Seoul.
A labourer works at the main factory of Hyundai Motor in Ulsan, Seoul. PHOTO: REUTERS

SEOUL (REUTERS) - South Korea's manufacturing activity shrank in June for a fourth consecutive month and by the fastest pace in nearly three years, a private survey showed on Wednesday, adding urgency to Seoul's efforts to pump-prime a sputtering economy with fresh stimulus.

The Nikkei/Markit purchasing managers' index (PMI) on South Korea's manufacturing sector slid to a seasonally adjusted 46.1 in June - the lowest since 45.7 in September 2012 - from 47.8 in May, Markit Economics said in a statement.

It was the fourth consecutive month in which the index was below the 50 mark that separates expansion and contraction.

A sub-index for new export orders during the month edged down to 47.6 in June from 47.9 in May, also the fourth straight month of contraction that underlined the impact of weak global demand as growth slows in Korea's main market China.

The growing pressure on the economy was highlighted in job losses in the manufacturing sector, which shed workers at the fastest pace in 7 months.

Another sub-index for new orders received both from the local and overseas clients fell to 43.7 in June from 47.2 in May, marking the lowest since September 2012 as domestic demand decreased.

South Korea's domestic consumption has been hit hard by the spread since late May of the deadly Middle East Respiratory Syndrome (Mers), prompting the central bank to cut interest rates to a record low in early June and the government to draw up a stimulus package worth over $13 billion.