S.Korea June manufacturing PMI misses 50, at 7-mth low
SEOUL, July 1 (Reuters) - South Korea's June manufacturing activity contracted for the first time in five months as export orders declined, a private sector survey showed on Monday, casting doubts over the government's growth target for the year as the recovery in Asia's fourth-largest economy encounters roadblocks.
The HSBC/Markit purchasing managers' index (PMI) of South Korea's manufacturing sector fell to a seasonally adjusted 49.4 in June from 51.1 in May, Markit Economics said, marking the weakest reading since 48.2 in November 2012.
It was also the first time that the index had fallen below the 50 mark separating growth from contraction since a reading of 49.9 in January.
In June, the sub-index for new export orders also dropped to a seasonally adjusted 48.6, the weakest since October 2012 and the first fall below the 50-mark since December 2012.
"Korea's weaker manufacturing conditions are reflective of sluggish demand and, to some extent, sustained weakness in the yen," said HSBC economist Ronald Man in a statement. "If the downward trend is sustained, this will likely prove negative for Korea's growth outlook and put pressure on policymakers in Seoul to deliver more stimulus."
Data showed on Friday that South Korea's industrial output unexpectedly shrank by a seasonally adjusted 0.4 percent in May on a monthly basis, underscoring downside risks to the government's new growth forecast of 2.7 percent for the year.
(Reporting by Se Young Lee; Editing by Shri Navaratnam)