Despite Dimming Growth, Analysts See Bright Side

The rate of increase of industrial production slowed again in April, due largely to decreased output of semiconductors and sluggish exports. The data is giving rise to speculation that pumping vigor into the economy may take longer than expected.

The National Statistical Office said Tuesday industrial growth in April rose 5.7 percent compared with the identical period last year. That result compares with 8.8 percent in February and 6.4 percent in March. The agency said growth was boosted by strong automobile sales.

Production when semiconductors are excluded rose 4.2 percent over April last year, compared with 0.8 percent in the previous month and 2.1 percent in February.

The agency's head of economic statistics, Park Hwa-soo said, "The growth rate in no way indicates a dramatic fall in industrial output. We expect the rate to continue around 5 to 6 percent for a while."

Consumption figures continued to remain weak. Retail sales for the month rose a mere 0.2 percent, but wholesale fared better due to automobiles, with a 4.8 percent increase, the agency said.

Merchandise inventory grew also, but capacity utilization fell as companies saw inventory pile up.

But one private economist was optimistic. "The rate of increase in industrial production was relatively strong when you take out semiconductors and exports," said Samsung Economic Research Institute's Hong Sun-yeong. "What we need to keep an eye on is the continued slump in business investment, which may weaken the economy's potential competitiveness."

by Kim Won-bae