Korean Manufacturing Activity Is Contracting

South Korea's manufacturing PMI fell to 49.8 in February from 50.9 in January.

Any reading below 50 signals contraction, and it's the first time this reading went sub-50 since September.

Here are the key points via Markit:

• Marginal decline in manufacturing production
• New orders broadly stagnate, despite growth in new business from abroad
• Employment expands at modest pace

"Korea's weaker manufacturing conditions in February suggest that the recovery will be gradual," said HSBC's Ronald Man. "The decline in new orders and output will make it difficult for the economy to sustain strong sequential growth. The silver lining is that stronger orders from China were recorded, which is essential for Korea to stay on track for an export-led recovery. We remain cautious on the growth outlook and expect the economy to grow 3.2% in 2014."