Euro zone crisis fails to curtail industrial outputKorea’s industrial output grew in May from a year earlier despite persistent euro zone debt problems and market uncertainties, a government report showed yesterday.
According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries expanded 2.6 percent last month from a year earlier. In April, the output remained unchanged from the same month in 2011.
Industrial production inched up 1.1 percent on-month, slightly picking up speed from a 0.9 percent gain in April, the report said.
The country’s service sector output also advanced 2.2 percent on-year in May, while edging up 0.2 percent from the previous month.
The output figure came a day after the government lowered its growth outlook for 2012 from 3.7 percent to 3.3 percent, citing strong headwinds from the euro zone debt problems and faltering economies in major countries.
During the first quarter, the gross domestic product of Asia’s fourth-largest economy expanded 2.8 percent from the same quarter a year earlier, the slowest pace since the first quarter of 2009. Korea’s economy, heavily dependent on trade, has been hit hard by shrinking demand for its goods. The government predicted the country’s exports will grow 3.5 percent this year, far lower than a 19-percent advance registered a year earlier.
Slowing export growth has been taking a toll on industrial output.
In January, the output shrank 2.1 percent on-year, the first contraction in 31 months. Following a 14.4 percent spike in February, industrial production has been growing at a relatively anemic pace.
Cloudy market conditions are holding back corporate investment, which is the main gauge of future industrial production, according to the report.
Facility investment contracted 1.5 percent on-year in May and shrank 0.8 percent from a month earlier. The facility utilization ratio of manufacturers stood at 79.3 percent, unchanged from a month earlier, the report showed.
Consumption remained relatively strong last month, holding up industrial output weighed down by slowing market demand.
The retail sales index rose 2.2 percent on-year in May, thanks to increased demand for vehicles and other products related to entertainment, hobbies and sports activities. It is also up 1.1 percent from a month earlier, the report showed.
The index measuring the current economic conditions, however, dropped 0.6 points from a month earlier and the leading composite index, a gauge of economic performance eight to 15 months ahead of time, also fell 0.4 points over the same period, the report showed. Yonhap