Industrial indicators were largely negative for December

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Industrial indicators were largely negative for December

Despite positive news of a sharp increase in exports, Korea’s economic indicators remained bleak as factory operations slow down and consumption retreated for the second consecutive month.

According to Statistics Korea Wednesday, overall industrial output for December remained unchanged from the previous month. Overall industrial output, which declined in September and October, turned around to post a 1.8 percent monthly increase in November.

When compared to a year ago, output grew 3.3 percent, slower than the 4.9 percent year-on-year growth reported in November.

While manufacturing and mining industry output declined 0.5 percent and the construction industry subsided 1.8 percent compared to November, services increased by 0.3 percent largely thanks to the release of new mobile games while public and administrative output grew 1.9 percent.

When compared to a year ago, manufacturing and mining output saw slower growth then in November. Last month, output grew 4.3 percent, slower than November’s 5.3 percent. Even services saw a decline in annual growth from 2.7 percent in November to 1.7 percent in December.

Consumption, which has played a significant role in the Korean economy since 2015, continued to decline in December. Last month consumption shrunk 1.2 percent compared to the previous month, sharper than 0.1 percent drop in November. While sales of durable goods like automobiles grew 1 percent, sales of semi and non-durable goods like clothing shrunk.

Even when compared to the previous year, consumption in December grew 1.6 percent, slower than the 3.2 percent annual growth reported in November.

Although investment in production, including machinery and logistics equipment, continued to grow, the growth was slightly slower. Overall investment in December was up 3.4 percent, slower than the 5.9 percent growth reported in November. Even annual growth was slower at 10 percent compared to November’s 10.4 percent.

On average, factories operated at 73 percent of their capacity in December, a 0.8 percentage points drop compared to the previous month. However, the average operation rate for the entire year was 72.4 percent. This was 1.9 percentage points lower than in 2015 and the lowest level in 18 years.


BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]
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