Industrial output rebounds as retail sales continue to fall

Visitors examine a semiconductor wafer at the Semiconductor Exhibition held at Coex, Gangnam, in October 2023. [NEWS1]

Korea's industrial output rebounded in April following a sharp drop a month earlier, but retail sales and investment continued to fall for the second consecutive month, data showed Friday.

The automotive sector drove the growth, while semiconductor production shrank on month for the second month in a row.

The country's industrial output rose 1.1 percent in April compared to the previous month, according to data compiled by Statistics Korea.

Compared to a year earlier, industrial output advanced 3.1 percent.

In March, industrial production fell for the first time since October, and the 2.1 percent fall was the largest decline since February 2020, due mainly to the falling production of semiconductors, cars and other items.

The upturn in April came as the manufacturing output advanced 2.8 percent.

The auto output, in particular, jumped 8.1 percent to lead the overall increase. It was the largest growth since January 2023, when the figure came to 8.7 percent.

However, chip production shed 4.4 percent on month, extending the losing streak to a second month, though the semiconductor output climbed 22.3 percent compared to a year earlier.

"The on-month fall in the semiconductor production was due to a high base effect. The industry is showing an uptrend, and it remains to be seen if the April data will indicate any adjustment," an agency official said.

However, retail sales, a gauge of private spending, shed 1.2 percent on month mainly due to the falling sales of cars and other durable goods.

Retail sales slid 2.6 percent on year.

"Consumption appears to have lagged behind, while production is going well. The pace of economic recovery differs according to sectors," the official noted.

Facility investment inched down 0.2 percent in April from the previous month, the second consecutive fall, as rising investments in the transportation equipment sector offset the falling investment in machinery.

Construction investment, however, jumped 5 percent on month, the data showed.

Korea experienced a gradual economic recovery since around the second half of 2023, driven by rising exports, but private consumption has remained weak amid still-high inflation and interest rates.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]