South Korea’s factory output continued to gain for a second year in 2022 despite slow industrial activity in December with recoveries also seen across consumption and corporate investment.

According to data released by Statistics Korea on Tuesday, the seasonally adjusted mining and manufacturing output jumped 1.4 percent in 2022 from the previous year. Manufacturing output gained 1.3 percent in 2022 on the back of increased production of chips (10.6 percent) and automobiles (9.8 percent), although slowing from a 7.6 percent gain in the previous year.

Korea’s overall industrial output including services activity added 3.3 percent in 2022 from a year ago, marking the second year of gain after a 4.9 percent growth in 2021.

Services output increased 4.8 percent in 2022 from the previous year. Output in accommodation and restaurants rose 19.2 percent, arts, sports, and leisure 27 percent, and transportation and warehouse 8.6 percent.

Services output had declined 2.0 percent in 2020 in the outbreak of Covid-19 but gained 4.4 percent in 2021.

Retail sales, a gauge of private consumption, rose 0.2 percent last year from a year ago. Facility investment also gained 3.3 percent on the back of increased spending in machinery and transportation equipment.

In December alone, however, the seasonally adjusted mining and manufacturing output fell 2.9 percent from the previous month. Manufacturing output fell 3.5 percent due to weak exports. Chip production rose 4.9 percent in December from a month ago and primary metal 3.1 percent but auto production and electronic component production fell 9.5 percent and 13.1 percent each.

Overall industrial output including services in December also fell 1.6 percent, the steepest decline in 32 months. The output had declined for four straight months from July to October before a brief rebound in November.

Services output in December also fell 0.2 percent, marking the fourth straight month of decline. It is the first time for the services output to fall since June-September in 2010.

Retail sales rose 1.4 percent but facility investment fell 7.1 percent.

The cyclical component of composite coincident index, which reflects current economic situations, fell 0.9 point to 100.9 in December, the steepest decline in 32 months.

The cyclical component of composite leading index, which predicts the turning point in business cycle, also fell 0.5 point to 98.5.

The Cyclical Component of Composite Coincident Index, which reflects the current economic conditions, dropped 0.9 percentage points to reach 100.9. The drop was the biggest ever in 32 months since April 2020. The Cyclical Component of Composite Leading Index, which predicts the turning point in business cycle, fell down to 98.5.

By Pulse

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