The latest report shows facility investment, industrial output, and retail sales losing ground in May.
Ahn Sung-jin has details.
Despite a strong performance in the chip sector, the month of May logged a “triple minus” for industrial output, production, and investment.
According to data from Statistics Korea on Friday overall industrial production dropped by nearly 1 percent compared to April.
This is largely due to a decline in production in the mining industry, including basic metals and output for materials used to make automobiles, while machinery production also fell.
However, production in the semiconductor industry saw its first rebound in three months.
As production increased, chip exports saw a stable outflow, with inventory reduced by 32.8 percent on year.
That resulted in overall manufacturing inventory dropping nearly 10 percent on-year, the largest drop in 15 years.
Meanwhile, infrastructure investment fell for the third straight month as investment in transport facilities and mechanical equipment dropped.
Domestic consumption has also been slowing down.
“Chip exports are showing a solid recovery, but consumption is unable to keep up with production, and due to a base effect from last month, investment is also weak leading to a triple minus. Normally production and spending go together, but in this case, consumption is slow to catch up.”
Retail sales, a key measure of private spending, fell by 0.2 percent, falling for the second straight month,
as sales of semi-durable goods, such as clothing dropped even though sales of non-durable goods such as food and durable goods such as cars increased.
An official from Statistics Korea, however, noted that with a rebound in consumer sentiment for June, consumer spending for the 2nd quarter may improve.
The agency also noted that the drop in figures for May is largely due to a base effect with the country’s industrial output showing a strong improvement last month, and pointed out that with stable exports, the overall performance for April and May are stable.
The government pledged to prioritize economic recovery while providing support for sectors seeing weak domestic consumption such as small business owners.
Ahn Sung-jin, Arirang News.
Source : Arirang TV, https://www.arirang.com/news/view?id=272570
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