Is South Korean manufacturing a good barometer of global demand?
Scotiabank economists see some bright spots in global manufacturing and particularly in Korean exports.
From a global perspective, China remains the weak link; however, we do flag the solid rebound in Korean exports (+18% y/y), which tend to be quite cyclical and are a decent barometer of how global trade is doing. As illustrated below, the bounce in Korean exports points toward a recovery in the world manufacturing Purchasing Managers' Index (PMI) over the coming months (assuming the historical relationship holds)
They also note that world manufacturing PMIs are showing some signs of life from low levels. That extends to today's Australian AiG survey.
