South Korea assesses economic slowdown still led by manufacturing sector

[Photo by Yonhap]

South Korea’s economy is slowing with sluggish exports mainly in the manufacturing industry, the government said for a fourth month.

The Ministry of Economy and Finance Friday said in in its “Green Book” economic assessment report for May that the country’s manufacturing sector-led slowdown continues amid a slump in exports and capex. It has been four months since the Green Book first characterized the economy as slowing down in February.

The biggest reason for the slowdown is the decline in exports. The country’s outbound shipments fell 14.2 percent last month from a year earlier. This is the seventh month of decline since October last year.

With exports falling, the country’s trade deficit ran for 14 months until last month.

However, the current account balance returned to a surplus in March for the first time in three months.

Capital investment has also been sluggish lately. In March, the index fell 2.2 percent from the previous month due to a decline in investment in transportation equipment.

The labor market was also affected, with the number of people employed in manufacturing declining for four consecutive months on-year until last month.