August figures show slight improvementProduction, investment and consumption all recorded on-month rises in August, possibly signaling an improvement in the sluggish economic outlook that dominated the first half of the year.
According to Statistics Korea data on Monday, all industrial output rose 0.5 percent in August from the previous month thanks to a 1.2 percent rise in output from the services sector. Retail sales, a measure of consumption, rose 3.9 percent on month, the highest in over eight years, while facilities investment rose 1.9 percent.
Two of the three indicators - industrial output and retail sales - also recorded on-year rises in August, although facilities investment fell 2.7 percent from the previous year.
The drop in investment in August was still an improvement compared to the on-year decline of 4.9 percent in July and 9.3 percent in June.
Consumption remained particularly weak earlier this year, recording back-to-back months of on-month declines prior to August.
The statistics office explained that consumption in August rose due to increased sales of durable goods, which rose 8.3 percent on month. Passenger vehicle sales increased 10.3 percent due to new vehicle releases.
It added that an early Chuseok holiday season this year, falling at the start of September, also led to a 3 percent increase in sales of non-durable goods such as gift sets in August.
Overall improvement in production was focused in the service sector as production from mining and manufacturing fell 1.4 percent on month and 2.9 percent on year.
The declines were led by an on-year fall of 11.9 percent in the vehicle sector and 16.9 percent in electronic components.
Semiconductor output, however, increased 12.2 percent in August from the previous year despite trade headwinds such as Japan’s July restrictions on exports to Korea of three industrial materials essential for semiconductor manufacturing.
“There are still supplies left and efforts to develop replacement products, so a negative effect on the semiconductor and display industries’ production has yet to show,” explained Kim Bo-kyoung, a director at Statistics Korea.
Semiconductor shipments rose 6.1 percent from the previous month, while inventory fell by 7 percent.
The restrictions also had a limited impact on investment.
Imports of semiconductor manufacturing machinery, an indicator for investment, also increased in August to $27.3 million from $24.3 million the previous month, although far short of the $32.2 million worth of equipment imported in August last year.
The coincident composite index - a measure of the current economic situation - rose 0.2 points in August from July, at 99.5.
The statistics agency, however, remained cautious of calling it an economic turnaround, citing a 0.1 point fall in the composite leading index, which predicts the future direction of the economy, in August from July at 98.3.
The improvement in economic indicators follows robust job numbers in August, when unemployment hit a near-four-year low, at 3 percent.
BY CHAE YUN-HWAN [email@example.com]
with the Korea JoongAng Daily
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