Economy ends year weaker than at start

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Economy ends year weaker than at start

The Korean economy is ending 2015 with a sputter, reports showed on Wednesday.

The country’s industrial output continued shrinking in November for the second month in a row.

According to Statistics Korea, total industrial output slid 0.5 percent in November from the previous month largely due to a 2.1 percent fall in manufacturing production. Despite slight increases in the output of services and public administration, the manufacturing and construction sectors showed influential falls.

The declined production is also attributable to sluggish exports that continued falling for the 11th consecutive month. Shipments of manufacturers slid 2.2 percent month on month. The chip making industry saw a 9.7 percent plunge in output.

Retail sales dipped 1.1 percent after massive discount events ended in October, the report showed. Owing to the unprecedented sales events promoted by the government, retail sales rose 3.2 percent in October.

Facility investments dropped 6 percent month on month, indicating a dire business sentiment across the country.

The average operation ratio of local manufacturers stood at 72.7 percent, down 1.2 percentage points from the previous month, according to the statistical report.

A Bank of Korea report also showed on Wednesday the sentiment of manufacturers weakened, with the business sentiment index (BSI) reading 67 for January, a six-month low.

A BSI reading below the benchmark 100 means pessimists about the economic outlook outnumber optimists. The monthly survey is conducted on about 2,800 local businesses, including about 1,700 manufacturing companies.

The BSI of non-manufacturing firms also weakened, dipping 2 points from the previous month to 69 for January.

Overall, local companies expect their sales and exports to continue heading south into the new year.

“Despite a sound growth trend in the services sector, exports continued falling, leading to drops in production and investment,” said Yoon In-dae, director of economic analysis at the Ministry of Strategy and Finance.


BY SONG SU-HYUN [song.suhyun@joongang.co.kr]




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