South Korea’s manufacturing sector slipped back into contraction in October, ending a brief rebound as firms grew more cautious amid global uncertainty and the impact of U.S. tariffs.
The S&P Global Manufacturing PMI for Asia’s fourth-largest economy fell to 49.4 in October from 50.7 in September, sliding below the 50-point threshold that separates growth from contraction. The reading marks deterioration in factory activity for eight of the past nine months, underscoring a fragile industrial outlook.
S&P Global economist Usamah Bhatti said the improvement seen late in the third quarter “largely evaporated” in October, as new export orders fell back into decline, especially from the U.S., and domestic demand weakened. “Manufacturers noted that tariffs further impacted the sector, as new export orders fell into decline again, particularly emphasizing the decrease in U.S. export demand,” he said.
The downturn came just as U.S. President Donald Trump and South Korean President Lee Jae Myung finalized a deal to cap U.S. tariffs on Korean cars and auto parts at 15%, a development that offered little immediate relief to exporters.
The sub-index for new orders fell to 47.6 from 50.2, while output slipped to 49.5 from 51.5, indicating broad-based weakness across the sector. Input costs rose sharply at the start of the fourth quarter, though some firms were able to pass higher prices onto customers.
