SEOUL (REUTERS) - South Korea's factory activity expanded for a second straight month in February as growth in output and new orders was sustained, a private manufacturing survey showed on Friday (March 2).
The Nikkei/Markit purchasing managers' index (PMI) on operating conditions for the manufacturing sector was 50.3 for February, compared with January's 50.7.
The 50-point level separates expansion from contraction on a monthly basis.
February marked the first time since July 2016 that industrial output and new orders expanded for two consecutive months. IHS Markit said panelists reported that domestic as well as overseas clients in February showed more demand.
Manufacturers, expecting growth could be maintained, hired more staff for the first time in six months.
The hiring was at the "sharpest extent in 18 months, signaling confidence that demand is strong enough to warrant increased production capacity," said Joe Hayes, an economist at IHS Markit.
In February, manufacturers faced higher input costs due to increased labour and raw material costs, which meant tighter profit margins.
Hayes said that "selling price inflation eased, while input prices increased sharply," causing firms to boost input buying during February with expectations that the upward trend in raw material prices would continue.