SEOUL, July 1 (Reuters) - South Korea's factory activity contracted for the fifth straight month in June, though the pace of decline eased, supported by improving domestic economic prospects under the country's new administration, a business survey showed on Tuesday.
The Purchasing Managers Index (PMI) for manufacturers in Asia's fourth-largest economy, released by S&P Global, edged up to 48.7 in June, from 47.7 in May.
The index has stayed below the 50-mark, which separates expansion from contraction, since February.
"Manufacturing output and sales both decreased, albeit at a softer rate than that seen in May, as firms signalled pockets of improvements in the domestic market," said Usamah Bhatti, economist at S&P Global Market Intelligence.
South Korea's consumer sentiment reached a four-year high in June, buoyed by political stability following a snap presidential election on June 3 that ended six months of uncertainty, according to an earlier central bank survey.
In Tuesday's survey, business sentiment regarding the year-ahead outlook for output rebounded from the previous month to its strongest since May 2024, as firms reported reduced concerns about global economic risks.
However, while output and new orders fell at a milder pace, new export orders declined slightly faster due to weaker sales across key markets such as Japan, China and the United States, the survey found.
South Korea's new administration, led by President Lee Jae Myung, has pledged short-term measures to support the economy as tariff negotiations continue with Washington.
A senior South Korean trade official said on Monday that Seoul will seek an extension to the 90-day pause on U.S. tariffs, set to expire next week, as talks are expected to continue beyond the deadline.
Reporting by Jihoon Lee; Editing by Jacqueline Wong
Source: Reuters