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(2nd LD) S. Korea's industrial output rebounds in Dec.

All News 09:50 January 29, 2016

(ATTN: ADDS finance ministry's comments in last 4 paras)

SEJONG, Jan. 29 (Yonhap) -- South Korea's industrial output moved up for the first time in three months in December on the back of robust growth in the chemical and refinery sectors, a government report showed Friday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries gained 1.3 percent last month from a month earlier.

The increase marks a rebound after two straight months of negative growth.

Compared with a year earlier, however, industrial production fell 1.9 percent.

Output of chemical and refinery sectors rose 4.7 percent and 7.3 percent on-month, respectively, which were offset by a 13.8 percent decline in the communications equipment industry.

"Industrial output improved to some extent in December from a month earlier as they adjusted inventory levels in October and November," said Choi Jung-su, director of the short-term industrial statistics division. "But the production still remained sluggish due to weak global demand and lackluster exports."

Outbound shipments by Asia's fourth-largest economy plunged nearly 8 percent in 2015, with the monthly figure posting negative growth every month.

Production in the service sector, a key part of the economy, remained unchanged from a month earlier but rose 3 percent from a year earlier.

Domestic spending edged down 0.1 percent on-month in December due to a drop in sales of clothing and food, according to the report, while the figure jumped 3.5 percent on-year on the back of stellar sales of durable goods.

"Consumption figures were very good in October, led by government-led promotions," said Choi, referring to nationwide discount events and an excise tax cut program. "When we see the on-year gain, it is quite favorable."

For all industries, which include the service and construction sectors, output gained 1.2 percent from the previous month, snapping a two straight month losing streak. It also rose 2.3 percent from a year earlier.

For the whole of 2015, the Statistics Korea report showed that industrial output slipped 0.6 percent from a year earlier due mainly to sluggish production in the electronics and carmaking sectors.

The average operating ratio in the manufacturing industry reached 74.2 percent in 2015, down 1.9 percentage points from a year ago.

But the output by all industries rose 1.5 percent from a year earlier on improved activities in the construction and service sectors.

Domestic consumption jumped 3.9 percent on-year last year as sales of durables, including passenger cars soared 10.1 percent on-year.

"Sluggish external factors have put a damper on South Korea's industrial output in 2015, but domestic demand steered the economy onto a recovering track," the finance ministry said in a release.

The ministry, however, said the country's exports are expected to remain sluggish due to a slowdown in China and fast-falling oil prices.

"Rising household purchasing power will contribute to a recovery in domestic demand in the coming months on the back of low oil costs and increased employment," it said.

"But we have to check whether or not the private and corporate sectors will get dull in the face of external uncertainties and the end of the tax cut program."

brk@yna.co.kr
(END)

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