Chip turnaround boosts industrial output in September

An official at Statistics Korea announces September's industrial output on Tuesday at the government complex in Sejong. [YONHAP]

A trio of key economic indicators — industrial output, retail sales and facility investment — rose in September thanks primarily to a rebound in the semiconductor industry, reversing from a slump in the recent months.

Industrial output advanced 1.1 percent on-month in September following a 2 percent on-month gain in August.

Retail sales, a gauge of private spending, and facility investment also logged an on-year growth last month, signaling a gradual economic recovery, according to Statistics Korea.

It was the first time since May that the country reported an increase in the three major indicators on industrial activities.

Compared with a year earlier, industrial output rose 2.8 percent.

September's growth was led by the chip industry, which logged a 12.9 percent on-month gain, the data showed.

The output from the semiconductor sector reported an on-month rise for the second month in a row following a 13.5 percent jump in August, and it was the first time in more than 14 years that the country's chip output logged double-digit growth for two straight months, according to the agency.

In an on-year time frame, the output from the semiconductor sector surged 23.7 percent in September, the sharpest on-year rise since June 2022, when the figure stood at 24.9 percent.

Korea's chip exports surged 69.4 percent on-month in September, a record increase since the agency began compiling the related data in 2000.

The rising global demand brought down the country's chip inventory by 6.7 percent last month, the data showed.

The solid performance of the chip industry pulled up the overall output of the manufacturing sector by 1.9 percent on-month.

Of the major sectors, output from the machinery and equipment segment rose 5.1 percent, while that from the medicine and auto industries slid 13.1 percent and 7.5 percent, respectively.

The service sector reported a 0.4 percent on-month rise in output on the back of the upbeat accommodation and dining sector, which offset the decline in output from the art, sports and leisure fields.

"The growth in the output from the manufacturing sector was partly due to low base effects, but industry overall has shown signs of a recovery from the third quarter," an agency official said.

Compared with a year earlier, however, sales fell 1.9 percent on weak demand for both durable and semi-durable goods, the data showed.

Facility investment climbed 8.7 percent in September from a month earlier, driven by the machinery and the transportation equipment sectors.

But the September reading marked a 5.7 percent fall from a year earlier, according to the agency.

"The September readings indicated signs of an economic recovery led by exports, and such an uptrend is forecast to continue through the fourth quarter," the finance ministry said in a release.

"But the country has seen growing uncertainties, such as the Israel-Hamas conflict, and the government will enhance market monitoring and swiftly implement necessary measures," it added.

During the first 20 days of October, exports rose 4.6 percent on-year on the back of robust shipments of cars and petroleum products.

Exports have fallen since October last year, though September logged the smallest on-year decline so far this year, government data showed.

The data on exports for October will be available Wednesday.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]