Factory activity in South Korea experienced the most severe contraction seen in over a decade during April as the coronavirus pandemic forced the country as well as the rest of the world to go into shutdown. The Manufacturing PMI reading for April fell to 41.6 from 44.2 in March, the weakest figure since January 2009, and well below the 50-threshold indicating contraction.

South Korea’s export reliant factories were especially affected by the shutdowns across Europe and the US, even as global supply chains were disrupted by the raging pandemic. New orders fell to an 11-year low during April while export orders experienced the sharpest contraction ever recorded.

As a result of the shutdowns and the fall in demand, the sub-index measuring manufacturing production declined to 34 in April from 38.5 in March. Meanwhile, manufacturers across the country resorted to laying off their workers and imposing hiring freezes, with employment suffering the worst contraction on record.

According to Joe Hayes, economist at IHS Markit, “Although China, South Korea’s biggest export market, appears to be slowly re-opening for business, it’s clear this will be far from sufficient to offset the severe weakness elsewhere”.