Korea's industrial output retreats in Jan, but consumption and capex strengthen

[Photo by Yonhap]

South Korea’s factory output contracted in January on reduced activity at electronics component and transportation equipment lines after two-month strengthening, although domestic demand front showed improvement.

The seasonally adjusted mining and manufacturing output in January fell 1.6 percent from a month ago on the back of positive numbers of 2.7 percent in December and 0.3 percent in November, according to Statistics Korea Tuesday. Against a year ago, it gained 7.5 percent.

Factory operation averaged 73.2 percent in January, down 1.1 percentage points from the previous month. Inventory levels slipped 0.8 percent on month and 2.5 percent on year.

Auto output jumped 12.8 percent, but it was mitigated by a 9.4 percent drop in electronic parts output such as display panels and 12.4 percent plunge in transportation equipment production such as vessels.

The benchmark Kospi finished Monday 1.03 percent higher at 3,043.87. The Korean won closed at 1,124.0 against the U.S. dollar, down 0.5 won from the previous session.

Overall industrial output including services activity in January dropped 0.6 percent from the previous month, the first on-month decline since May 2020.

Service output inched down 0.2 percent from a month ago. Financial and insurance services grew 1.3 percent but culture, sports and leisure services tumbled 15.4 percent amid the strengthened social distancing code that restricted business operation to curb virus spread.

Retail sales grew 1.6 percent in January after a 0.1 percent rise of the previous month. Durable goods like consumer electronics jumped 4.8 percent and semi-durable goods like clothes 1.0 percent, while non-durable goods like medical equipment and medicine edged down 0.1 percent.

Capital investment jumped 6.2 percent from a month earlier. Investment in machinery surged 11.2 percent but spending in transportation equipment like ships plunged 8.4 percent.

The coincident index, reflecting current economic activities, slipped 0.2 point in January. The leading indicator, a gauge of where the economy is headed, rose 0.3 point.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]