Go to Contents Go to Navigation

(2nd LD) S. Korea's industrial output gains 2.3 pct on-yr in Aug.

All News 10:26 September 30, 2016

(ATTN: ADDS more info in paras 15-16, finance ministry's comments in last 4 paras)

SEJONG, Sept. 30 (Yonhap) -- South Korea's industrial output rose for the fourth consecutive month in August on brisk sales of semiconductors and chemical products, a government report showed Friday.

Production in the mining, manufacturing, gas and electricity industries rose 2.3 percent last month from a year ago, according to the report by Statistics Korea.

The August figure marks the fourth straight month of advance, following a 4.7 percent jump in May, a 0.8 percent gain in June and a 1.6 percent rise in July.

From a month earlier, industrial output retreated 2.4 percent in August, however, due to a sharp drop in auto production.

Production in the service sector added 4.7 percent from a year earlier, with a 0.7 percent on-month gain.

For all industries, output moved up 5 percent on-year in August but retreated 0.1 percent from a month earlier, the report said.

(2nd LD) S. Korea's industrial output gains 2.3 pct on-yr in Aug. - 1

Retail sales continued their upbeat mode in August, rising 6 percent on-year and 2 percent from a month ago, as the scorching heat during the summer days boosted purchases of expensive home appliances, such as air conditioners.

But car sales fell for the second month in a row last month to drop 5.8 percent on-year due mainly to the government-led excise tax cut program that ended June 30.

"Figures related to private consumption have been in a positive mode for months as domestic demand seems to be recovering from a deep slump stemming from the Middle East Respiratory Syndrome," said Eo Woon-sun, director of the short-term industrial statistics division at Statistics Korea.

"And the record hot summer prompted demand for electronics, lending support to an on-month gain in August."

For the production side, output of semiconductors soared 27.5 percent in August to lead the overall increase in industrial output last month on rising demand for mobile chips for new smartphones like Samsung Electronics Co.'s Galaxy Note 7 and Apple Inc.'s iPhone 7.

Production of chemicals rose 5.1 percent on-year, and that of steel products climbed 5.2 percent last month.

But it was largely offset by a drop in car production caused by partial strikes at major carmakers, including industry leader Hyundai Motor Co.

According to the company, the walkout has brought in a production loss of some 117,000 units of vehicles, worth 2.5 trillion won.

The sluggish automobile production dragged down the factory utilization rate to a 7 1/2-year low of 70.4 percent last month.

Excluding the effect of the cut in car production, the utilization rate stayed at 72.1 percent in August, down slightly from the previous month's 73.8 percent, the agency said.

(2nd LD) S. Korea's industrial output gains 2.3 pct on-yr in Aug. - 2

The statistics official said industrial output is closely linked with the country's exports, which gained 2.6 percent last month to snap the 19th straight month negative streak that started in January last year.

"The upturn in last month's exports is largely due to increased working days from a year earlier," the official said. "It's too early to say that the production side is safely on a recovering track."

The finance ministry said that the country's consumer and business sectors are unlikely to rebound sharply in the near future due to lingering uncertainties at home and abroad, stemming from a possible U.S. rate hike and North Korean provocations.

The consumer sentiment index remained nearly flat at 101.7 for September from the previous month, while the business sentiment index stayed at 71 for two straight months.

"Strikes at carmakers, the recall of Galaxy Note 7s and an anti-graft law that took effect this week will weigh heavily on the country's production and consumption in the coming months," the ministry said.

Many are concerned that the anti-graft law, which came into force earlier this week to control every person-to-person meeting of government officials, teachers and journalists, will hurt private consumption to a large extent.


Send Feedback
How can we improve?
Thanks for your feedback!