South Korea’s Manufacturing PMI Hits 3-Month High, Signaling Sector Expansion

South Korea | EcoPulse24

The manufacturing Purchasing Managers’ Index (PMI) in South Korea showed significant improvement in December 2025, rising to 50.1 points from 49.4 in November, according to S&P Global data. This return to expansion territory marks the first time in three months and reflects the fastest pace of growth since September.

This improvement was driven by a rebound in new orders for the first time in three months, recording the strongest increase since November 2024, indicating a recovery in domestic demand. New export orders also returned to growth for the first time since September, supported by improved external demand.

Improvement in Employment and Operational Spending

The data also showed an increase in employment levels and a rise in purchasing activity for the first time since September, at the fastest pace since August 2024. This reflects improved business sentiment about future activity.

However, industrial production continued to contract, albeit at a slower rate compared to November, suggesting that the recovery is still in its early stages.

Rising Inflationary Pressures

On the price front, input cost inflation accelerated to its highest level since July 2022, driven by rising raw material prices and unfavorable exchange rate fluctuations. As a result, output price inflation also reached a nine-month high.

Improved Business Confidence

The survey also showed a clear improvement in business confidence, which reached its highest level since May 2022, supported by expectations of increased sales and the launch of new products.

EcoPulse24 Analysis

The return of South Korea’s manufacturing PMI above 50 points signals a gradual shift in the sector’s momentum after a period of slowdown, supported by improved domestic and external demand. However, cost pressures and rising industrial inflation represent key challenges for companies and could impact profit margins moving forward. Overall, the data reflect a cautious recovery that will depend on global demand strength, exchange rate stability, and supply chain conditions.