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Industrial output remains weak amid construction slump; consumer spending shows recovery: KDI

Published: 16 Oct. 2025, 14:09 Updated: 16 Oct. 2025, 14:15

Containers are stacked at Pyeongtaek Port in Gyeonggi on Sept. 4. [YONHAP]

Korea's industrial output continues to show weak performance due to a prolonged slump in the construction sector, while consumer spending is showing signs of improvement, a state-run think tank said Thursday.

"Recently, the domestic economy has maintained a low growth rate in industrial production due to the downturn in the construction industry, although the slowdown in consumption appears to be easing," the Korea Development Institute (KDI) said in its monthly economic assessment.

The report highlighted that construction investment has continued to decline sharply, while facility investment is also undergoing a period of adjustment. Meanwhile, manufacturing investment remains relatively sluggish.

According to data from the Ministry of Data and Statistics, industrial output in August remained unchanged from the previous month. Construction output fell by 6.1 percent year-on-year, marking 16 consecutive months of decline.

The KDI observed that the slowdown in consumption is gradually easing due to falling market interest rates and ongoing government support policies.

Despite some relief in global trade tensions following recent tariff agreements between the United States and its major trading partners, the KDI warned that Korea's export sector still faces downward pressure.

In late July, Seoul and Washington reached a tentative agreement to reduce proposed U.S. tariffs on Korean imports from 25 percent to 15 percent. In return, Korea committed to investing $350 billion in the United States, with negotiations nearing completion.

"High tariffs on automobile exports remain in place, and rising tensions between the United States and China are adding to trade uncertainty," the report said.

Yonhap