Expert Forecasts Paint a Grim Picture for South Korea's Manufacturing Sector

Experts are predicting a challenging month ahead for South Korea's manufacturing sector in May, with nearly all industries, except for semiconductors, expected to see declines in production, domestic demand, and exports. This downturn is anticipated to fall significantly below average performance levels.

Sharp Decline in Professional Survey Index Signals Widespread Pessimism

The May Professional Survey Index (PSI) for manufacturing, as reported by the Korea Institute for Industrial Economics & Trade (KIET), has plummeted to 73, a stark 27 points below the baseline of 100. This marks a significant 26-point drop from April's 99 and the second consecutive month the index has fallen below the critical threshold.

Export and Domestic Demand Outlooks Diverge

With the export outlook PSI at 65, lower than the domestic demand PSI of 81, South Korea's export-reliant manufacturing sector is bracing for tough times. Other indicators like production, investment, and profitability also remain below the baseline, signaling a broad deterioration in business conditions.

Sector-Specific Challenges Emerge

Major industries, including ICT, materials, and machinery, all reported PSI figures below 100, with semiconductors being the notable exception at 110. This exception is attributed to the global surge in demand driven by advancements in artificial intelligence technologies.

A Glimmer of Hope in a Sea of Despair

While sectors like shipbuilding and biotechnology showed resilience, others such as displays, mobile phones, and automobiles continue to struggle, highlighting the uneven impact of the current economic downturn across South Korea's manufacturing landscape.