Korea’s industrial output growth softens in Aug on sluggish domestic demand

2017.09.29 13:51:10 | 2017.09.29 16:20:46

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South Korea`s industrial output inched up in August mostly led by activity in electronics component fabs while auto-making and other manufacturing were depressed by strikes and sluggish demand.

According to Statistics Korea on Friday, seasonally adjusted mining and manufacturing output in August grew 0.4 percent on month, slowing from 1.7 percent gain in the previous month. Against the year-ago period, it was up 2.7 percent.

Memory chip and electronics components shipment stayed strong, growing 12.4 percent and 5.5 percent, respectively, on month, to lead the overall growth in factory data. Transportation equipment production plunged 18.5 percent on month and automobile 4.0 percent.

Factory operation averaged at 72.0 percent, falling from 73.1 percent in the previous month due to partial strikes in the automobile sector. Inventory levels rose 3.4 percent on month.

Service sector output, an indicator for domestic demand, added a mere 0.1 percent on month on small gains in social welfare and science sectors. Output in wholesale and retail sector as well as in sports and leisure contracted as consumer sentiment dipped amid uncertainties in the economic outlook and escalating geopolitical risks.

Retail sales - a barometer for private consumption - sank 1.0 percent, ending a two-month growth streak, as durable goods like home appliance and non-durable goods like food products fell 2.7 percent and 0.5 percent, respectively.

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Capital investment shrank 0.3 percent on month, narrowing for two months in a row. Investment in transportation equipment expanded 6.3 percent, but those in machineries narrowed 2.7 percent.

Machinery orders, which is closely linked to facilities investment, surged 38.1 percent on year.

Construction investment declined 2.0 percent on month, reversing from 3.0 percent gain in July.

The composite index of coincident economic indicators, which reflects current economic conditions stood at 100.8, up 0.1 percentage point from the previous month.

The Kospi index closed Friday at 2,304.47, up 0.90 percent from the previous session. The Korean won closed at 1,145.40 won against the US dollar, up 3.70 won from the previous session`s close.

By Boo Jang-won

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