Industrial output dips in May despite chip sector growth

Cargo is piled up at Gamman Pier in Busan Port. [YONHAP]

Korea's industrial output fell in May following a rebound a month earlier despite growth in the chip sector, as automotive production, as well as retail sales and facility investment, slumped on month.

Industrial output fell 0.7 percent in May, compared to a 1.2 percent increase a month earlier, according to data released by Statistics Korea on Friday.

Compared to a year earlier, industrial output advanced 2.2 percent in May.

It marked the first time in 10 months that the industrial output, retail and facility investment indexes simultaneously lost ground on month.

The output in the mining, manufacturing, gas and electricity industries fell 1.2 percent as losses in the automobile and machinery sectors offset gains in the chip industry.

The output from the chip sector rose 1.8 percent on month in May, while that of the automobile and machinery industries slid 3.1 percent and 4.4 percent, respectively.

The service sector saw its output edge down 0.5 percent due to a weaker performance in the finance and telecommunications industries, although output from the wholesale and retail sectors gained ground.

Retail sales, a gauge of private spending, shed 0.2 percent on month due mainly to falling sales of clothes and cosmetic products. From a year earlier, retail sales slid 3.1 percent.

The demand for nondurable goods, including food, edged up 0.7 percent over the period, but the output of semidurable goods, such as clothes, fell 2.9 percent on month in May, the data showed.

Facility investment inched down 4.1 percent in May from the previous month, marking the third consecutive fall, the data added.

The agency attributed the decline to decreased investment in the automobile and machinery sectors, which dropped 12.3 percent and 1 percent, respectively.

Kong Mi-sook, a senior official at Statistics Korea, said the overall conditions in the country's industrial output remain sound, considering it still expanded from a year earlier.

"[The industrial output] remains solid on the back of exports, including chips, but consumption lagged behind the recovery," Kong added.

The finance ministry said the Korean economy is on the path of economic recovery, with its exports anticipated to expand on year for nine consecutive months through June.

"Despite a correction in industrial output in May, the economy in general seems to be on a recovery path," the finance ministry said in a statement, noting that risks in the global supply chain remain a hurdle.

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