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Korea's industrial output rises on semiconductor sector recovery

Published: 29 Mar. 2024, 10:22 Updated: 29 Mar. 2024, 16:48

JIN MIN-JI
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A customer shops at a major discount chain store in Seoul on March 26, 2024. [YONHAP]

Korea’s industrial output rose for the fourth straight month in February on the back of the recovery of the semiconductor industry.

Industrial output advanced by 1.3 percent last month compared to the previous month, as per Statistics Korea data released on Friday. This marks a rise from the 0.4 percent monthly growth seen in January and December, and the 0.3 percent increase in November.

The growth was helped by the overall mining and manufacturing sector, which increased 3.1 percent. It was aided by production of chips that jumped 4.8 percent and mechanical equipment that soared 10.3 percent.

On year, industrial output rose 2 percent. It was helped by a 65.3 percent spike in chip production in the same period, the largest rise since late 2009.

The chip recovery is expected to continue through March, as exports increased 46.5 percent on year in the first 20 days of the month.

Chip inventory shrank 3.1 percent in February from a month earlier, driven by strong demand for artificial intelligence memory chips.

Retail sales, a gauge of private spending, were down 3.1 percent on month in February, the largest drop since July last year. Sales of nondurable goods, like food, beverages and cosmetics, were down 4.8 percent while those on communication devices and household appliances also decelerated 3.2 percent.

“Spending on services is growing, but retail sales of goods were down,” said Kong Mi-sook, a senior official at Statistics Korea, noting that “the overall index is looking good, but spending is not catching up” to the recovery.

Facility investment rose 10.3 percent, the most rapid jump since 12.7 percent in November 2014. Construction investment fell 1.9 percent.

“The economic recovery is becoming clear, as industrial output rose for the fourth consecutive month,” said the Ministry of Economy and Finance in a statement, adding that there is a need for the creation of balanced growth.

BY JIN MIN-JI [[email protected]]