For a sixth consecutive month in December, South Korean factory activity continued to shrink, according to a new business survey on Monday. Analysts noted that the global economic slowdown combined with a local trucking strike to produce the worst slump in demand seen in 2-1/2 years.

In December the S&P Global purchasing managers’ index (PMI) dropped to a seasonally-adjusted 48.2, from 49.0 in November.

The decline comes after two months of small improvements following hitting an over two-year low of 47.3 in September. However it remained below the 50-level which separates expansion from contraction for a sixth consecutive month.

Sub-indexes indicated that for an eight month in a row, output contracted, as new orders continued to decline for the sixth month in a row, and new export orders were down for the tenth straight month.

Both overall orders, and exports, saw new orders fall at the fastest rate since June of 2020, as input purchases and backlogs of work fell at the fastest rate in roughly two and a half years.

Suppliers’ delivery times came in with the worst number since June, due in part to South Korean truckers going on strike for the second time in 2022.

Laura Denman, economist at S&P Global Market Intelligence said, “The December PMI data provided further evidence that South Korean manufacturing firms have continued to struggle in the face of the current global economic downturn. Low levels of client demand, on both a domestic and international scale, were central to the latest deterioration.”

With respect to inflation, input prices rose the slowest since January of 2021. Output price increases eased significantly to the weakest in the 27 months it had been rising.

Manufacturers measured barely-optimistic over future output over the coming year, with the level of optimism measured just barely above the neutral level, and the lowest it had measured since July 2020.