Domestic shipments by Korean manufacturers fell more than 4 percent in the first quarter on year amid sharp reduction in facility investment by component producers and subdued demand.
According to data released by the Statistics Korea on Thursday, the country’s manufacturing domestic supply index for the January-March period stood at 98.7, down 4.1 percent from the same period a year earlier. The index measures total domestic supply of Korean-made products and those imported with base year set at 2015 as 100. The supply of locally manufactured goods shrank 3.9 percent against a year earlier period and that for imported goods was down 4.3 percent on year.
The index for capital goods, which refers to machinery and equipment used for manufacturing products to reflect manufacturers’ investment trend, plunged 23.3 percent from a year earlier period for the largest-ever dip since the statistics bureau started compiling such data in 2010.
The sharp contraction in domestic supply of capital goods against a year ago is largely due to the high base effect against heavy expansion last year amid memory chip boom, a Statistics Korea official said.
The country’s top semiconductor companies Samsung Electronics and SK Hynix that had accelerated ramp-up of memory chips since 2017 have sharply cut down capital expenditures in recent quarters as the industry went into a bust phase. As a result, domestic supply of machineries and equipment for manufacturing semiconductors plummeted 20.2 percent in the first quarter from the same period a year earlier.
The index for consumer goods fell 0.8 percent on year. The figure for intermediate goods rose 0.2 percent on year on growth in DRAM chips and automotive components.
The supply index for transportation equipment used in shipyards was down 43.5 percent. Supply of electrical equipment also fell 6.7 percent on year.
The only gainer was primary metal that rose 1.9 percent from a year earlier period.
Of the domestic supply of manufacturing goods, imported products accounted for 26.3 percent, up 0.1 percentage point from a year ago.
The index for final goods, which combines consumer goods and capital goods, slipped 10.2 percent on year.
By Kim Tae-joon and Cho Jeehyun
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