A survey released on Monday indicated that South Korea's manufacturing activity expanded at its fastest rate in over five years in May, driven by companies stockpiling in anticipation of disruptions from the Middle East conflict. Data from S&P Global showed the country's Purchasing Managers' Index (PMI) for May rose to 54.8 from 53.6 in April, reaching its highest level since March 2021. Both output and new order growth rates hit near five-year peaks during the month. However, new export orders declined for the first time in six months, influenced by weakening market demand. Usama Bhatti, an economist at S&P Global Market Intelligence, commented, "The South Korean manufacturing sector continued its expansion in May, but the strong overall figures require a nuanced interpretation." He added, "Surveyed firms widely attributed capacity expansion primarily to inventory-building activities. The ongoing conflict in the Middle East is pushing up prices and disrupting manufacturing supply chains, prompting companies to increase their stockpiles." South Korea's industrial output for April fell short of expectations. As Asia's fourth-largest economy, it recorded its fastest quarterly economic growth in nearly six years in the first quarter, benefiting from a surge in semiconductor exports fueled by the global artificial intelligence investment boom.