Japan and South Korea’s manufacturing sectors gained momentum in July as strong semiconductor and artificial intelligence demand lifted factory activity and export orders, with both economies recording another month of expansion.
Japan’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) stood at 54.5 in July, easing from 54.8 in June but marking a seventh straight month above the 50-point threshold separating growth from contraction. Manufacturing output expanded at its fastest pace since February 2014 while new orders rose at their quickest rate since January 2022.
Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said companies had pointed to stronger global demand across the semiconductor industry, alongside growth in AI-related manufacturing areas.
Overseas new orders also rose at their fastest pace in more than five years, with firms reporting stronger demand from Asia and the US. Purchasing activity increased at its sharpest pace since April 2022 as manufacturers built inventories to guard against supply disruptions linked to uncertainty in the Middle East.
South Korea’s PMI rose to 53.1 in July from 52.1 in June, extending expansion to an eighth consecutive month. Output and new orders accelerated while new export orders returned to growth at their strongest pace since April 2021.
Usamah Bhatti, economist at S&P Global Market Intelligence, said production and new orders increased again, with particularly strong performances in the semiconductor and automotive sectors.
The data comes after South Korea recorded stronger-than-expected second-quarter growth, supported by a semiconductor export boom.
Reuters
