SEOUL (Reuters – South Korea’s factory activity grew sharply in July 2013, as production and new orders increased. However, persistent supply chain issues weighed heavily on the outlook. This was revealed by a private-sector survey on Thursday.

In seasonally adjusted terms, the IHS Markit purchasing manager’s index (PMI), rose to 52.8 in January from 51.9 December. It remained above 50 points that indicate an expansion of activity for 16 consecutive months.

With improved demand from China, the United States and Europe, South Korean export orders increased to 50.4 in December from 49.5 in Dec., a signal that global trade has begun to recover after the pandemic.

Due to higher new orders, output volumes increased for the first-time in four months during January.

South Korean manufacturing companies entered 2022 having experienced the greatest improvement in their operating conditions over six months. According to Usamah Bhatti (an economist at IHS Markit), the Manufacturing PMI’s readings improved after firms reported an increased output and sharpest increase in order inflows in July.” The data was accompanied by a note from Bhatti.

However, the supply chain disruptions continued to impede a stronger recovery of activity and higher demand within the manufacturing sector.”

Survey results showed that Omicron and sustained material shortages were holding back a better recovery.

Supply chain disruption was evident when suppliers saw their delivery times decrease for 27 consecutive months.

The sub-index of job growth revealed that employment increased for the second consecutive month in January. Firms reported more orders, which encouraged them to increase their staff.