South Korea's manufacturing outlook dims in August, falling below baseline for first time in 3 months

South Korea's manufacturing sector is expected to slow next month, according to a new industry outlook.

The Korea Institute for Industrial Economics and Trade released its Policy Survey Index on Sunday, putting the August manufacturing business conditions forecast PSI at 95. It is the first time in three months the PSI has fallen below the baseline of 100.

A PSI above 100 indicates that more experts expect conditions to improve compared with the previous month, while a reading below 100 signals that more expect conditions to worsen. The survey was conducted July 13 to 17 among 129 industry experts across various sectors.

However, the August export outlook PSI came in at 111, remaining above the baseline.

Breaking down results by sector, most industries posted readings below the baseline, with the exception of semiconductors (156), suggesting the broader slowdown in domestic manufacturing sentiment will continue. Home appliances (71), automobiles (83), machinery (100) and steel (67) recorded the steepest declines.