Industry Trends
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[April 2024] Industry Trends
Date
2024.04.08
All Industries
In January 2024, Korea's industrial activities increased for three consecutive months, marking the first time in 24 months that all industrial production grew for three straight months.
| All Industries | Mining & manufacturing | Service | Retail sales | Capital investment | Construction completed | |
|---|---|---|---|---|---|---|
| ‘Monthly Change(%) | ∆0.4 | ▲1.3 | ∆0.1 | ∆0.8 | ∆5.6 | ∆12.4 |
In January, production of mining and manufacturing industries declined in semiconductors (△8.6 percent) due to a declining trend at the beginning of the quarter, but the decline was compensated by an increase in production of other manufacturing industries, including telecommunications. Despite a decline in wholesale and retail (△1 percent), service industry production grew (1.1 percent in Dec. 2023 and 0.1 percent in Jan. 2024), backed by increases in telecommunications (+4.9 percent) and real estate (+2.6 percent). Retail sales increased by 0.2 percentage points from December 2023, as durable goods (-1 percent) and semi-durable goods (-1.4 percent) declined, but sales of nondurable goods (2.3 percent) expanded. Capital investment contracted from the previous month, led by a decline in machinery (-3.2 percent) and a sharp drop in transportation equipment (-12.4 percent). Civil engineering (12.8 percent) increased on the back of expanded plant construction, while construction improved (12.3 percent) both in residential and non-residential sectors. The cyclical change in the coincident index turned positive for the first time in three months, driven by increases in retail sales and completed construction projects. The cyclical change in the leading index stayed flat despite improvements in inventories and stock prices, due to falling construction orders. Recently, the manufacturing sector and exports have led the recovery of the Korean economy amidst uncertainties in domestic consumption. At the same time, the economy carries upside and downside risks going forward. On the production side, the rebound in key industries such as semiconductors, continued improvement in exports, and the spreading prospect of a soft landing in the global economy are positive, but geopolitical unrest and supply chain risks, as well as monetary policies of major countries in line with global inflation, are burdening the economy. As for consumption and investment, improving consumer sentiment, an increase in international visitors, and plans to expand capital investment in key industries (ten major manufacturing industries, +10 percent YoY) are positive factors, while household debt and real estate PF risks, slow construction orders, and delays in construction of major business sites are downside factors.
※ Source: Ministry of Economy and Finance (moef.go.kr)
Trends by Industry
Automotive
‘December 2023 Domestic Consumption Fell Year-onYear Due to the Base Effect of Strong Domestic Sales at the End of 2022’
→ Exports in January increased by 21.2% year-on-year backed by growing EV exports and brisk overseas production. Domestic consumption in December 2023 fell by 11.7% year-on-year due to weak consumer sentiment and the base effect. Production in December 2023 decreased from a year ago as demand for internal combustion engine parts weakened.
→ Exports in January increased by 21.2% year-on-year backed by growing EV exports and brisk overseas production. Domestic consumption in December 2023 fell by 11.7% year-on-year due to weak consumer sentiment and the base effect. Production in December 2023 decreased from a year ago as demand for internal combustion engine parts weakened.
Shipbuilding
‘Exports Increased for Six Straight Months with the Delivery of High-End Offshore Plants’
→ In December 2023, the capacity utilization rate of the shipbuilding industry maintained a downward trend as shipbuilders increased their investments to improve production capacity, and production and shipments fell due to the effect of December 2022. Exports increased by 76.7% in January to grow for the sixth consecutive month, as high-value ships and offshore plants were delivered. While imports of ship engines and parts fell in December 2023, imports increased by 19%, driven by imports of ships from Japan and Singapore.
→ In December 2023, the capacity utilization rate of the shipbuilding industry maintained a downward trend as shipbuilders increased their investments to improve production capacity, and production and shipments fell due to the effect of December 2022. Exports increased by 76.7% in January to grow for the sixth consecutive month, as high-value ships and offshore plants were delivered. While imports of ship engines and parts fell in December 2023, imports increased by 19%, driven by imports of ships from Japan and Singapore.
General machinery
‘Production Continued Slumping, Exports Increased for 10 Months in a Row to Reach Second-Largest on Record’
→ In December 2023, general machinery exports recorded the second largest volume ever, but the industry’s production fell by 7.0% year-on-year as domestic consumption continued to slow down. In January, exports grew by 14.5% year-on-year as exports to the United States continued growing and those to China turned around, while exports to the EU remained sluggish. Imports in December 2023 continued to decline for the seventh consecutive month, increasing by 6% year-on-year as Korean companies continued to cut back on capital investment.
→ In December 2023, general machinery exports recorded the second largest volume ever, but the industry’s production fell by 7.0% year-on-year as domestic consumption continued to slow down. In January, exports grew by 14.5% year-on-year as exports to the United States continued growing and those to China turned around, while exports to the EU remained sluggish. Imports in December 2023 continued to decline for the seventh consecutive month, increasing by 6% year-on-year as Korean companies continued to cut back on capital investment.
Steel
‘Growing Demand from Emerging Economies Pushed Exports Upward’ ’
→ Production increased by 11.8% year-on-year in December 2023, backed by increased demands for sheet metal products from the auto and shipbuilding industries and the base effect of the previous year's production decline. In January, exports grew by 2% year-on-year as emerging countries such as India, Latin America, and the Middle East saw their economic conditions improve and expanded infrastructure investment. Imports decreased by 5.1% year-on-year in December 2023 due to sluggish domestic consumption of construction bar steel and falling import unit prices.
→ Production increased by 11.8% year-on-year in December 2023, backed by increased demands for sheet metal products from the auto and shipbuilding industries and the base effect of the previous year's production decline. In January, exports grew by 2% year-on-year as emerging countries such as India, Latin America, and the Middle East saw their economic conditions improve and expanded infrastructure investment. Imports decreased by 5.1% year-on-year in December 2023 due to sluggish domestic consumption of construction bar steel and falling import unit prices.
Oil refining
‘ Against Falling Unit Prices, Higher Volume Pushed January Exports Upward’
→ In December 2023, production increased by 4.9% yearon-year as Korean refineries increased capacity utilization rates in response to growing exports. In January, growing export volume pushed exports upward by 11.8% from a year ago.
→ In December 2023, production increased by 4.9% yearon-year as Korean refineries increased capacity utilization rates in response to growing exports. In January, growing export volume pushed exports upward by 11.8% from a year ago.
Wireless communication devices
‘Amidst Expectations for Gradual Recovery of Global Smartphone Market, January Exports Plunged Due to Delay in Full-Scale Rise in Shipments at the Beginning of the Year’
→ With the global economic downturn delaying the recovery of smartphone demands, exports fell as consumers postponed purchase in anticipation of new product launches scheduled for February. In December 2023, the slowdown in exports cut production by 1.8% year-onyear, while shipments plummeted by a significant 30.5%, resulting in a 21.1% increase in inventories. Imports in December 2023 decreased by 1.9% year-on-year, mainly in the imports of smartphones.
→ With the global economic downturn delaying the recovery of smartphone demands, exports fell as consumers postponed purchase in anticipation of new product launches scheduled for February. In December 2023, the slowdown in exports cut production by 1.8% year-onyear, while shipments plummeted by a significant 30.5%, resulting in a 21.1% increase in inventories. Imports in December 2023 decreased by 1.9% year-on-year, mainly in the imports of smartphones.
Semiconductor
‘Semiconductor Exports Up for Three Straight Months, Growing at a Faster Pace’
→ In January 2024, exports reached USD 9.4 billion, up 56.2% year-on-year, which is the highest increase ever for the month of January. The semiconductor production index in December 2023 rose sharply year-on-year (by 53.3%) to 175.8, and also grew by 8.5% month-onmonth, indicating strong growth.
→ In January 2024, exports reached USD 9.4 billion, up 56.2% year-on-year, which is the highest increase ever for the month of January. The semiconductor production index in December 2023 rose sharply year-on-year (by 53.3%) to 175.8, and also grew by 8.5% month-onmonth, indicating strong growth.
Display
‘Production Continued to Decline in 2023 Due to LCD Production Cuts’
→ Display production continued to decline last year due to the ripple effect of LCD facility closures. Despite falling OLED exports, January panel exports increased by 2.1% thanks to rising LCD panel prices and grew for six straight months. Wider application of OLEDs in IT devices is expected to boost exports, but the trend is unlikely to produce a visible result in Q1
* * Please note that the latest data available in Statistics Korea are for the previous month in the case of exports and the month prior to the previous one for production.
※ Source: Ministry of Economy and Finance (moef.go.kr), Korea Institute for Industrial Economics and Trade(kiet.re.kr)