S. Korea’s factory output worst since pandemic-hit Q2 2020

South Korea’s factory output dipped by the biggest pace since the second quarter of 2020 amid early pandemic outbreak as exports turned negative for the first time since then while domestic demand was hit by high inflation and interest rates.

According to data released by Statistics Korea on Wednesday, the seasonally adjusted mining and manufacturing output in November fell 3.5 percent from a month ago, extending losing streak for the fourth straight month, on weak auto and machinery making.

Against pandemic-ridden year-ago period, output fell 1.1 percent.

Manufacturing output fell 3.6 percent on month in November on reduced production of automobiles and machinery equipment. Automobile production softened 7.3 percent, machinery equipment 7.9 percent, and medical items 10.1 percent. Manufacturing output was affected largely by October exports that contracted for the first time in two years.

Production of other transportation equipment, on the other hand, was up 5.5 percent from the previous month in November, chips 0.9 percent, and mobile and broadcasting equipment 1.9 percent.

Inventory levels fell 1.4 percent on month but rose 4.5 percent on year. Factory operation averaged 72.4 percent in November, down 2.7 percentage points from the previous month.

Korea’s benchmark Kospi fell 0.44 percent to 2,422.70 and secondary Kosdaq 0.62 percent to 723.03.

Statistics Korea Briefing [Photo by Yonhap]

Overall industrial output including services activity slipped fell 1.5 percent from the previous month, extending losing streak into the fourth month and the largest on-month decline since April 2020 when industrial production fell 1.8 percent in the outbreak of Covid-19. It is the first time for industrial output to contract for four straight months since Jan.-May of 2020.

Industrial output declined 0.2 percent on month in July, 0.1 percent in August, and 0.4 percent in September.

Services output declined 0.8 percent on month in the steepest pace in 22 months.

Retail sales fell 0.2 percent on month in November, extending the losing streak for the third month.

Sales of semi-durable goods like clothing fell 2.5 percent, durable goods like automobiles 4.3 percent while those of non-durable goods like food items rose 3.1 percent. Demand for automobiles fell on base effect while for clothing also declined on warmer-than-usual weather.

Facility investment stayed flat from the previous month.

The cyclical component of composite coincident index, which reflects current economic situations, was also flat at 102.4.

The cyclical component of composite leading index, which predicts the turning point in business cycle, fell for a fourth consecutive month by 0.1 point to 99.2.

[Source : Statistics Korea]