Korea marks triple gain in output, consumption, capex in September

[Photo by Kim Ho-young]

South Korea’ production, investment, and consumption turned upward in September, marking the first triple gain in four months.

According to data released by Statistics Korea on Tuesday, the country’s overall industrial production rose by 1.1 percent in September from the previous month, led by semiconductors.

Retail sales increased by 0.2 percent, mainly in non-durable goods, including food and beverages, while facility investment went up 8.7 percent on month as investment in machinery and transportation equipment rose.

“Recently, our economy has been showing signs of a gradual rebound, with a recovery in manufacturing production and exports becoming more visible,” said Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho in a meeting of economy-related ministers on Tuesday.

“Exports are also expected to turn positive in October for the first time in 13 months, and the improving trend is expected to continue into the fourth quarter,” he added.

The Korean economy had shown signs of a downturn in July, with simultaneous decreases in production, consumption, and investment.

However, with the improvement in the semiconductor sector, production, shipment, export, and investment improved, leading to an increase in industrial production in August and September.

Semiconductor production showed double-digit growth for two consecutive months in September, the first time in more than 14 years.

It is also the first time in 90 months that all four sectors, including mining and manufacturing, services, construction, and public administration, showed growth for two consecutive months.

“Production, consumption, and investment experienced triple growth for the first time in four months since May,” said Lee Seung-han, an official from the Ministry of Economy and Finance. “In particular, all seven indicators representing production and spending were positive for the first time in 39 months since June 2020.”

Consumption also rebounded.

After two consecutive months of on-month declines in July and August, retail sales turned positive in September.

“Manufacturing production improved as semiconductors recovered,” said Shin Se-don, an economics professor at Sookmyung Women’s University. “It appears the economy has hit bottom and is now on the rise.”