On the back of an uptick in auto and machinery production, South Korea’s industrial output ended a four-month losing run in November. Nevertheless, a decline in semiconductor production, the nation’s biggest export, and projected economic growth indicators point to a rocky road ahead for the economy. The seasonally adjusted mining and manufacturing output in November increased by 0.4 percent from a month earlier, when it decreased at the fastest rate since the pandemic-affected second quarter of 2020, according to statistics released by Statistics Korea on Thursday.
After dropping 1.3 percent in July, 1.4 percent in August, 2.0 percent in September, and 3.5 percent in October, this was the first on-month rise in five months. The increase in production of automobiles and mechanical equipment, which together grew by 6.4 percent and 9 percent, respectively, more than compensated for a loss of 11 percent in semiconductor output caused by weak demand for IT products.
As a result, the country’s industrial production ended a four-month losing streak in November and edged up 0.1 percent on the month to 115.3. Factory output decreased by 3.7 percent from a year ago as a result of weak semiconductor and electronic parts manufacturing, which fell by 15.0 and 30.4 percent, respectively. The services sector, which includes accommodation and dining establishments, decreased by 0.6 percent from the previous month in November.
Problems still exist in South Korea
Retail sales, a measure of consumption, fell by 1.8 percent to 118.1 in October, in part because of the tragic Halloween crush in Itaewon. Since September, both the output and demand for services have decreased for three consecutive months. Eo Woon-sun, a senior Statistics Korea official, stated that the economy remains poor.
Semi-durable product sales, like apparel, were down 5.9% month over month, while durable product sales, like cars, fell 1.4 percent. Moreover, non-durable products like cosmetics had a 0.5 percent decline, reversing the previous month’s trend. After being unchanged in October, facility investment increased by 1.0 percent in November.
The composite coincident index’s cyclical component, which measures the state of the economy, registered 101.7, a decrease of 0.7 points from one month prior and the first drop in seven months. This was also the fastest decline in the 30 months since May 2020, when the pandemic caused the global economy to collapse. For the fifth consecutive month, the cyclical component of the composite leading index, which forecasts the business cycle’s turning point, fell by 0.2 points to 99.
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