Invest KOREA

Kong Mi-sook, Director of Economic Trend Statistics at Statistics Korea, is explaining the industrial activity trends for August 2024

at the Sejong Government Complex on the morning of the 30th. (Yonhap)

According to Pulse by Maeil Business News Korea,

South Korea’s industrial production rebounded for the first time in four months in August 2024, driven by increases in automobile and semiconductor production.

According to data released by Statistics Korea on Monday, the seasonally adjusted industrial output stood at 113.7 in August, up 1.2 percent from a month earlier.

The index had consecutively declined 0.8 percent, 0.1 percent, and 0.6 percent in May, June, and July 2024 respectively, after gaining 1.4 percent increase in April.

By industry, mining and manufacturing output rose 4.1 percent, driving the overall gain in all-industry production. This growth is the largest since a 5.4 percent increase in August 2023.

By item, communication and broadcasting equipment output fell 7.1 percent, but automobile and semiconductor output saw notable gains of 22.7 percent and 6 percent respectively.

Services output also grew 0.2 percent from the previous month for a third consecutive month of growth.

The increase was particularly pronounced in accommodation and restaurants (4.4 percent) and wholesale and retail trade (3 percent), which are closely related to domestic demand, thanks to lower-than-normal precipitation and an increase in foreign tourist arrivals.

“The manufacturing industry, particularly semiconductors, is in a strong position, and the service industry is also on a solid upward trend,” according to Kong Mi-sook, an economic trends and statistics officer at Statistics Korea, adding that “the base effect from the previous month‘s decline in automobile production contributed to the large increase in production.”

Shipments in the manufacturing sector decreased for electronic components and precision optical equipment, but increased for automobiles and petroleum refining, resulting in a 5.7 percent increase from the previous month.

Manufacturing inventories grew 1.4 percent month-on-month, driven by increases in communication and broadcasting equipment and electronic components.

The retail sales index, an indicator of retail consumption, increased by 1.7 percent, marking the highest growth rate in 18 months since a 4 percent increase in February 2023.

Retail sales had shown a fluctuating trend, with declines of 0.6 percent and 0.2 percent in April and May with an increase of 0.9 percent in June before falling 2 percent again in July.

Sales of semi-durable goods such as shoes and bags declined 0.9 percent in August, but those of nondurable goods such as food and beverages and durable goods such as passenger vehicles increased 2.7 percent and 1.2 percent respectively.

Retail sales declined by 1.3 percent from the same month in 2023, continuing a six-month streak of year-over-year declines.

Facility investment fell 5.4 percent from the previous month, with reductions in investments for both transportation equipment and machinery. This was due to the base effect from a significant increase in transportation equipment investment, driven by the introduction of aircraft in the previous month.

The value of construction completed, which represents the actual construction performance of construction companies in terms of value, also declined by 1.2 percent, with civil engineering projects increasing by 2.4 percent, while building construction decreased by 2.4 percent.

Construction orders, a leading predictive indicator for the construction industry, however, increased 7.2 percent year-over-year.

The cyclical component of the coincident composite index, a measure of current economic conditions, fell 0.1 points to 98.2, marking its sixth consecutive month of decline.

This is the first time the index has fallen for six consecutive months since the July to December 2018 period.

The cyclical component of the leading composite index, which predicts future economic conditions, also fell 0.1 points to 100.6.

“Looking at the overall trend, the leading index has been rising steadily since May 2023 with a mix of positive and stable movements,” Kong said. “It is expected that the coincident index will eventually follow this upward trend.”



By Pulse

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Source: Pulse by Maeil Business News Korea (September 30, 2024)