(Adds more details, analyst comment)
* S.Korea March factory activity contracts at faster pace
* March PMI at 48.4 vs 49.2 in Feb
* Manufacturers slash jobs amid corporate restructuring
* Weak export orders conflict with strong trade data
* Trend bucks signs of improvement elsewhere in Asia,
By Christine Kim
SEOUL, April 3 South Korea's manufacturing
activity contracted for an eighth straight month in March,
prompting factory owners to cut jobs at the fastest pace since
the global financial crisis, a private-sector survey showed on
The findings, if confirmed by economic data, could suggest
further risks to an already sluggish recovery in Asia's
fourth-largest economy, which is heavily reliant on exports and
facing stubbornly weak domestic demand.
The Nikkei/Markit purchasing managers' index (PMI) on South
Korea's manufacturing sector slipped to 48.4 in March on a
seasonally adjusted basis from 49.2 in February, data from IHS
A reading below 50 indicates activity during the surveyed
month contracted from the previous month, while levels above 50
point to expansion.
The March reading showed the sharpest contraction since
November last year, when the PMI stood at 48.0.
Factory output and new orders also shrank at a faster pace
than in February.
"A further and stronger recovery in exports is needed to
reduce inventories and encourage manufacturers to expand output
ahead," said economists at DBS Bank in a research note.
"An immediate recovery should be unlikely, given that the
possible stimulus measures will only arrive in the second half
of this year after the election is completed and a new
government takes office."
South Korea will elect a new president on May 9 after
ex-leader Park Geun-hye was ousted last month over an
With business conditions still deteriorating, manufacturers
slashed jobs by the most since late 2008, the survey showed.
That may bode ill for March job data slated for early next
week. The unemployment rate rose to a one-year high of 4.0
percent in February in seasonally adjusted terms.
South Korea is restructuring its shipping and shipbuilding
industries and thousands of jobs are expected to be lost during
the process that started last year.
Offsetting some of the gloom, the index for new export
orders rose to 49.1 for March from 48.9 in February -- still
contracting but at a more moderate pace as global demand picks
Some respondents said sales to China, South Korea's biggest
trade partner, had suffered in the face of political tensions
after Seoul's decision to deploy a U.S. anti-missile system.
Despite weak demand, however, the survey showed some
companies were able to rebuild profit margins by raising prices
of their goods.
The weak export order reading in the survey contrasted with
official data on Saturday that showed March exports grew more
than expected despite souring relations with China.
(Reporting by Christine Kim; Editing by Kim Coghill)