Korea’s factory output adds 5.1% in March on robust chip production

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South Korea’s factory output gained more than 5 percent in March from the previous month, lifting up the country’s overall industrial activity, on the back of robust production of semiconductors.

According to data released by Statistics Korea on Friday, the seasonally adjusted mining and manufacturing output in March rose 5.1 percent from the previous month on a rise in the production of chips, which gained 35.1 percent.

Manufacturing output also rose 5.7 percent on month in March but fell 7.5 percent from a year ago. Factory operation averaged 62.2 percent, up 3.3 percentage points from the previous month. Inventory levels were 0.5 percent lower on month but 10.6 percent higher on year.

The overall industrial output including services activity in March also rose 1.6 percent on month. It added 0.1 percent in December, remained unchanged in January, and rose 0.7 percent in February after falling 0.5 percent in November last year.

Service output added 0.2 percent in March from a month ago. Accommodation and restaurant sector dipped 3.4 percent, arts, leisure, and sports 1.6 percent, while finance and insurance rose 1.8 percent and property 3.1 percent, data showed.

Construction output fell 3.3 percent.

Retail sales, a gauge of private consumption, rose 0.4 percent on month, gaining for a second straight month after three consecutive months of decline between November last year and January this year.

Facility investment fell 2.2 percent on month in March led by sluggish activity in transportation equipment such as vessels.

The cyclical component of composite coincident index, which measures present economic activities, rose 0.6 point to 99.9 in March. The cyclical component of composite leading indicator, which predicts the turning point in business cycle, fell 0.3 point to 98.2.

“Production in the mining industry increased significantly while retail and service sectors continued their upward trend,” said an official from Statistics Korea. “But it is still too early to say that the economy has entered a recovery phase.”