Operating conditions across South Korea's manufacturing sector improved at a slower rate in August, with the S&P Global South Korea Manufacturing Purchasing Managers' Index (PMI) falling to 52.3 from 53.1 in July, according to data released on Tuesday.
The reading remained above 50, indicating improved sector performance, although growth moderated since the start of the third quarter.
The slowdown in overall growth came despite robust export demand, with export sales rising at the fastest pace since November 2020.
New orders increased for a ninth consecutive month, while output expanded for an eighth straight month. However, the pace of expansion eased slightly as capacity constraints persisted.
Capacity pressures intensified as material shortages hampered order completions. Backlogs accumulated at a faster pace, while finished-goods inventories fell at their sharpest rate since May as products were often delivered immediately after assembly.
Supply chain disruptions also persisted, with transportation issues linked to the Middle East conflict continuing to weigh on operations.
Meanwhile, manufacturers' confidence in the year ahead improved to its highest level in three months.