South Korea's manufacturing activity accelerated in December to its fastest rate in seven months, propelled by an increase in new orders, according to data released by HSBC Monday.

HSBC said that South Korea's Purchasing Managers' Index in December rose to a seasonally adjusted 53.9 from 50.2 in November. A reading above 50 indicates expansion while a reading below signals contraction.

"The Korean economy is ending 2010 on a strong note. With the global trade cycle firing up again, Korea especially stands to benefit," HSBC economist Kim Song-Yi said in a report.

While exports are accelerating again after a recent lull, the labour market is strengthening as well, which should help underpin consumption spending in the coming quarters, she said.

Input prices, however, increased at the fastest pace in December since February 2009 due mainly to rising raw materials prices, pushing up output prices, the HSBC report said.

Source: The Daily Star