Industrial output shot up 6.6 percent in February

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Industrial output shot up 6.6 percent in February

Korea’s industrial output jumped at the fastest pace in nearly four years in February, government data showed Friday.

Production in the mining, manufacturing, gas and electricity industries moved up 6.6 percent last month from a year earlier, marking the highest year-on-year gain since January 2013, when it posted a 9 percent rise, according to the data by Statistics Korea.

From a month earlier, however, the figure fell 3.4 percent on a sharp drop in chips and cars, backtracking from a 2.9 percent month-on-month gain in January.

Production in the service sector added 2.5 percent in February from a year earlier, with a 0.1 percent month-on-month rise.

Retail sales edged up 0.5 percent year on year last month and rose 3.2 percent from a month earlier, rebounding from the third consecutive month-on-month drop that started last November.

For all industries, output increased 4.2 percent year on year in February and edged up 0.4 percent from a month earlier, the data showed.

The statistics office said recent brisk demand for Korean-made chips led the steep year-on-year rise in industrial output in February.

Production of semiconductors climbed 2.4 percent year on year in February on the back of new smartphones like the Galaxy S8 of Samsung Electronics, slowing down from a 34.8 percent year-on-year surge in January and 14.3 percent jump in December.

Machinery equipment rose 21.3 percent year on year in February on rising demand for semiconductor manufacturing facilities, while output of cars jumped 11.9 percent last month from a year earlier.

The upbeat trend in industrial output is also boosted by the country’s exports, which expanded for four straight months in March on the back of rising oil prices and demand from emerging markets, the statistics office said.

The average factory operation rate stood at 70.9 percent in February, down 3.3 percent from the previous month.

On the demand side, however, private consumption remained tepid amid sluggish consumer sentiment and the diminished effect of the government-led consumption-boosting measures.

“On a month-on-month basis, retail sales turned around to rise 3.2 percent last month on recovering demand for new cars,” said Eo Woon-sun, director of the short-term industrial statistics division at Statistics Korea. “But we don’t think private consumption is firmly on track to recovery. We have to check whether this rebound will continue further.”

Last year, the Korean government ran an excise tax cut program on cars and held nationwide shopping promotion events to stimulate consumer sentiment. But retail sales started to go down in the fourth quarter of last year amid rising uncertainties at home and abroad stemming from the recent political turmoil and a protracted economic slump. YONHAP
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