In July 2025, Korea’s industrial activity increased for the second consecutive month (up 0.3 percent month-on-month and 1.9 percent year-on-year), driven by increases in mining and manufacturing (up 0.3 percent month-on-month and 5.0 percent year-on-year), services (up 0.2 percent month-on-month and 2.1 percent year-on-year), and public administration (up 2.8 percent month-on-month and 0.8 percent year-on-year).

In July, the mining and manufacturing sector increased despite declines in semiconductors and automobiles caused by base effects from the previous month, as electronic components and machinery equipment rose. The service sector also grew, led by growth in wholesale and retail trade, information and communications, and accommodation and food services. However, financial and insurance services, and professional, scientific, and technical services decreased. Retail sales saw the largest increase in 29 months since February 2023, driven by growth in sales of durable goods, semi-durable goods, and non-durable goods.

Capital investment increased, led by machinery (particularly general industrial machinery) and a significant rise in transportation equipment like automobiles and aircraft. Construction completed decreased slightly, as declines in building construction offset increases in civil engineering. Even as retail sales increased, the cyclical change in the coincident index fell due to decreases in imports and non-agricultural employment. Despite a decrease in machinery shipments, the cyclical change in the leading index rose, supported by rising stock prices and increased construction orders.

Key indicators of industrial activity improved for the second consecutive month, with retail sales posting their largest increase in 29 months, driven by factors like the distribution of people’s livelihood recovery consumption coupons. Positive signals for economic recovery appear to be strengthening, as consumer sentiment in August reached its highest level in 7 years and 7 months, and business sentiment rebounded following the resolution of U.S. tariff negotiations. The government will make every effort to stimulate the economy, including domestic demand, and successfully respond to U.S. tariffs.

‘June Exports Turned Upward, Driven by Strong Performance in Eco-friendly and Used Vehicles’
→ June exports increased by 2.4 percent year-on-year, supported by growth in finished vehicles and auto parts exports to the EU. Even as more imported vehicles, especially eco-friendly ones, were registered in May, domestic sales in May decreased by 1.4 percent. May production continued its year-on-year decline as both domestic sales and exports remained sluggish.

‘High Growth Sustained’
→ In May, production maintained a clear expansion phase and grew by 39.2 percent year-on-year. June exports rose by 18.8 percent year-on-year. May imports surged by 96.8 percent from a year ago, led by brisk imports of ships and ship engines. Up to May, cumulative orders for Korean ships fell by 34.4 percent year-on-year. While this appears relatively resilient compared to China's 57.7 percent decline, concerns persist over intensifying competition as orders for key vessel types like gas carriers plummeted.

‘May Production Continued to Grow Despite Weak Domestic Demand and Exports’
→ In May, production grew by 1.3 percent year-on-year even as domestic demand and exports remained weak. June exports fell by 7.6 percent year-on-year as global investment sentiment continued to contract. May imports rose by 1.9 percent year-on-year, influenced by the recovery of domestic demand and the increase of facility investments.

‘May Production Turned Upward, and June Exports Continued to Fall’
→ Even as the demand for steel bars for construction use remained sluggish, May production increased by 2.7 percent year-on-year, driven by expanded production of major plate products. Despite expansion into ASEAN, Korea’s largest export region, June exports decreased by 8.0 percent year-on-year due to weak economic conditions in major export markets and falling unit prices. May imports decreased by 19.7 percent year-on-year as weak domestic demand dampened the imports of key products and the imposition of provisional anti-dumping duties slashed the imports of products from China.

‘June Exports Decreased by 2.0 percent as Persistently Low Oil Prices Brought Down Unit Prices’
→ Even as refining margins rebounded, May production dropped by 2.9 percent year-on-year as refineries maintained conservative production levels by considering the weak trend seen in previous months. Falling unit prices caused June export value to decrease by 2.0 percent year-on-year despite an increase in export volume driven by high demand for petroleum products in the summer season.

‘June Exports Shifted to a 3.6 percent Year-on-Year Decrease, Primarily Driven by Components’
→Since the second quarter, the forecasts of global smartphone shipments have been revised downward, and despite an increase in the exports of finished smartphone products, June exports decreased by 3.6 percent year-on-year, primarily driven by components. May production grew by 6.0 percent year-on-year, shipments rose by 12.2 percent, and inventories shrank by 17.4 percent. May imports fell by 5.1 percent year-on-year, impacted by reduced imports of smartphones and wireless communication device components.

‘Exports Broke Records for Three Straight Months’
→ June exports grew by 11.2 percent year-on-year to reach USD 14.9 billion, setting a new record for June and continuing the strong semiconductor export trend. Semiconductor production in May increased by 18.1 percent year-on-year and 2.0 percent month-on-month, maintaining the strong growth.

‘June Exports Dropped Significantly due to Slowdown of Premium Market’
→June exports fell sharply by 36.1 percent year-on-year as the premium smartphone market slowed down and dampened demand. Even as the exports of OLED panels for IT products grew, exports in the first half of 2025 shrank by 14.4 percent year-on-year due to shrinking demand caused by deteriorating global consumption conditions. May production decreased by 2.8 percent year-on-year but increased by 1.4 percent month-on-month.