South Korea Manufacturing Activity Contracts on Weak Domestic Demand Despite Export Growth

• South Korea's manufacturing PMI fell below 50 in March, signaling a contraction in activity as weak domestic demand dragged on production and sales • Export orders rose for the third straight month, buoyed by demand from Southeast Asia, North America and Japan • Domestic demand has weakened due to prolonged high interest rates, raising concerns about the pace of economic recovery • Manufacturers cut back on finished goods inventories and input purchases to reduce costs amid weak domestic conditions • Manufacturers turned more optimistic for the year ahead on hopes for sustained demand growth in semiconductors and autos