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Industrial output rises in September while retail sales decline

Published: 31 Oct. 2025, 17:28 Updated: 31 Oct. 2025, 19:39

Lee Doo-won, the deputy director general for short-term economic statistics at Statistics Korea, announces the industrial activity trends for September and the third quarter of 2025 at the Government Complex Sejong on Oct. 31. [NEWS1]

Korea’s industrial output rose in September, buoyed by a rebound in the semiconductor industry, while retail sales declined for the second consecutive month.

The index of all-industry production in September stood at 115.5 — with 2020 as the benchmark year — up 1 percent from the previous month, according to data released on Friday by the Ministry of Data and Statistics. It marked the largest increase in three months since a 1.6 percent rise in June.

While the index rose in July, it fell 0.3 percent in August before rebounding in September. For the third quarter as a whole, the index grew 1.1 percent — the largest quarterly increase in eight quarters.

Production in the service sector rose 1.8 percent in September, the highest increase in 31 months since February 2023.

“The growth was driven by the issuance of consumption coupons and the release of new communication devices, which lifted wholesale and retail production by 5.8 percent,” said Lee Doo-won, the deputy director-general for short-term economic statistics at the Ministry of Data and Statistics. “Increased trading volume in the stock market also helped boost production in the financial and insurance sector by 2.3 percent.”

Despite a sharp jump in chip production, overall mining and manufacturing output declined by 1.2 percent, largely due to a steep drop in automobile production, which plummeted 18.3 percent — the biggest decline since May 2020, the height of the Covid-19 pandemic. The agency cited a base effect from August’s 21.2 percent surge.

Manufacturing, which makes up the bulk of the mining and manufacturing sector, also slipped 1.1 percent.

Samsung Electronics showcases physical samples of its sixth-generation high-bandwidth memory HBM4 and HBM3E at its booth during the Semiconductor Exhibition 2025 at Coex in Gangnam District, southern Seoul on Oct. 22. [PARK HAE-LEE]

Semiconductor production, however, surged 19.6 percent on month, the highest since March 2023, when production soared by 26.5 percent. The semiconductor production index hit a record high of 213.8 in September — the highest since data collection began in January 1980.

Retail sales, which reflect consumer goods purchases, declined 0.1 percent on month, extending a downtrend for a second month. Although the fall was much smaller than August’s 2.4 percent drop, some analysts raised concerns that the consumption boost from coupons may have been short-lived and concentrated in July.

However, retail sales in the third quarter rose 1.5 percent — the strongest growth in 16 quarters since the third quarter of 2021. It marked the first year-on-year increase in 14 quarters, following a 0.3 percent decline in the first quarter and flat growth in the second.

Investment indicators also showed improvement. Facility investment jumped 12.7 percent on month, the largest increase since February's 21.3 percent, driven by increased purchases of semiconductor manufacturing equipment.

Construction completed rose 11.4 percent, led by robust performance in the chip sector by companies such as Samsung Electronics and SK hynix. This was the largest gain since January 2022's 21.8 percent.

An HBM4 chip, SK hynix’s sixth-generation high-bandwidth memory, is displayed at the company’s booth during the Semiconductor Exhibition 2025 at Coex in Gangnam District, southern Seoul on Oct. 22. [YONHAP]

The government remains optimistic about the economic outlook, citing positive developments such as the resolution of tariff negotiations with the United States, a rebound in the semiconductor market, stock market momentum and solid consumer sentiment. Korea’s leading index of cyclical indicators, which forecasts future economic activity, rose for the fourth straight month.

“We will strengthen policy efforts to support economic recovery momentum through follow-up measures to tariff agreements and domestic demand stimulus,” a Ministry of Economy and Finance official said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM KYUNG-HEE [[email protected]]