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South Korea/Taiwan PMIs Point To Improved Global Trade Backdrop

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The South Korean and Taiwan PMI's showed sequential improvement in May. This bodes well for the global trade backdrop, all else equal. The chart below plots the average of the PMI readings for these two trade sensitive economies against global trade volumes in y/y terms.

  • South Korea's PMI rose to 51.6 (from 49.4 prior), which is back to around mid 2022 levels. Output surged to 53.3 from 50.1 in April, while new orders were also up versus the April print. This helps offset, at the margins, weaker than forecast export growth for May (data released over the weekend) with softness evident in exports outside of the tech space.
  • The Taiwan PMI continued a steady recovery, up to 50.9 from 50.2 in April. This is the highest read for the headline index since April 2022. Output rose to 52.6 from 51.4 prior and new orders were also up from the April outcome.

Fig 1: South Korea/Taiwan PMIs Point To Improving Global trade

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The South Korean and Taiwan PMI's showed sequential improvement in May. This bodes well for the global trade backdrop, all else equal. The chart below plots the average of the PMI readings for these two trade sensitive economies against global trade volumes in y/y terms.

  • South Korea's PMI rose to 51.6 (from 49.4 prior), which is back to around mid 2022 levels. Output surged to 53.3 from 50.1 in April, while new orders were also up versus the April print. This helps offset, at the margins, weaker than forecast export growth for May (data released over the weekend) with softness evident in exports outside of the tech space.
  • The Taiwan PMI continued a steady recovery, up to 50.9 from 50.2 in April. This is the highest read for the headline index since April 2022. Output rose to 52.6 from 51.4 prior and new orders were also up from the April outcome.

Fig 1: South Korea/Taiwan PMIs Point To Improving Global trade

Keep reading...Show less