South Korea December factory activity shrinks again as export orders slump - PMI

SEOUL - South Korean factory activity shrank for a second consecutive month in December as global demand further cooled, a private survey showed on Wednesday, adding to signs of softening in the export-dependent economy.

The headline Nikkei/Markit purchasing managers' index (PMI) sector rose to a seasonally adjusted 49.8 in December, from 48.6 in November, but remained below the 50-point level that separates contraction from growth.

New export orders declined for a fifth consecutive month, the survey showed, as the prolonged China-U.S. trade dispute hurt sentiment at a time of the slowing growth in the major economies.

Weak orders led some manufacturers to cut jobs for a second consecutive month. The employment sub-index was a seasonally adjusted 49.8 in December, the lowest in five months, from 49.9 in November.

"Order book volumes continued to deteriorate, prompting production cutbacks and stagnating employment," Joe Hayes, an economist at IHS Markit, said in a statement.

The latest survey added to signs that Asia's fourth-largest economy was losing momentum. The government and private-sector organisations have downgraded their growth forecasts for the economy in recent weeks.

On Dec. 17, the finance ministry cut its 2019 economic growth target to between 2.6 and 2.7 percent from the previous 2.8 percent, even after expanding next year's fiscal spending plans by the most in nine years.

(Reporting by Hayoung Choi; Editing by Choonsik Yoo and Richard Borsuk; Contact info: [e-mail]; [phone]; Reuters Messaging: [e-mail])