SEOUL (Reuters) - South Korea's factory activity grew at the sharpest pace since July last year as output and new order picked up but persistent supply chain woes weighed on the outlook, a private-sector survey showed on Thursday.
The IHS Markit purchasing managers' index (PMI) jumped to 52.8 in January in seasonally adjusted terms from 51.9 in December, remaining above the 50-point mark that indicates expansion in activity for a 16th consecutive month.
New export orders for South Korean manufactured goods returned to expansionary territory of 50.4 from 49.5 in December with improving demand from the United States, Europe and China, in a sign global trade will continue to recover from the pandemic.
Output volumes rose for the first time in four months in January, thanks to increased new orders.
"South Korean manufacturers entered 2022 with the strongest improvement in operating conditions for six months. The improved reading of the Manufacturing PMI came as firms reported a renewed rise in output and the sharpest improvement in new order inflows since July," said Usamah Bhatti, an economist at IHS Markit, in a note accompanying the data.
"That said, supply chain disruption continued to hold back a stronger recovery in activity and demand in the manufacturing sector."
The survey said a stronger recovery was held back by sustained material shortages and the impact of the Omicron variant.
In a sign of supply chain disruption, suppliers' delivery times deteriorated for the 27th month in a row.
A sub-index on job growth showed employment expanded for a second successive month in January, with firms reporting that more orders encouraged them to hire additional staff.