Korea’s factory output up 0.2% in May on sluggish domestic demand

2017.06.30 13:59:44 | 2017.06.30 14:08:19

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South Korea’s factory output recovered at modest pace in May primarily led by mainstay exports, while domestic demand stayed sluggish, government data showed.

According to Statistics Korea on Friday, seasonally adjusted mining and manufacturing output in May added 0.2 percent on month after 2.2 percent contraction in April. Against the same period in 2016, it was up 0.1 percent.

Manufacturing activity was driven largely by 9.1 percent on-month gain in semiconductor and 4.7 percent in electronics demand from overseas. Wireless equipment output, however, plunged 18.2 percent on month and car shipment down 1.9 percent.

Factory operation averaged at 71.4 percent, falling slightly from 71.9 percent in the previous month. Inventory levels rose 2.5 percent on month.

Service sector output, an indicator for domestic demand, dropped 0.3 percent on month - the first fall in seven months.

Retail sales - a barometer for private consumption - sank 0.9 percent on month to mark the largest fall since 2.1 percent in January this year.

“Consumer spending, in general, weakened as people stayed away from outdoor activities due to bad air from fine dust,” said Eo Woon-sun, director of the industrial statistics team at Statistics Korea.

Capital investment from companies rose 1.8 percent in May from the previous month. Investment in machinery surged 10.2 percent while those in transportation equipment plunged 17.6 percent.

Construction investment declined 1.6 percent on month.

The composite index of coincident economic indicators, which reflects current economic conditions stood at 100.8, down 0.2 percentage point from the previous month.

The leading composite index reflecting expectations for economic activities in months to come gained 0.2 percentage point to 101.2 percent amid sharp improvement in consumer confidence and bullish stock market.

By Kim Se-woong

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