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(2nd LD) Industrial output stays flat, consumption falls again in Oct.

Finance 09:52 November 30, 2020

(ATTN: UPDATES with more details in paras 5,6,7,12,18-19)
By Kim Soo-yeon

SEOUL, Nov. 30 (Yonhap) -- South Korea's industrial output stayed flat in October from a month earlier while consumption and investment declined again, data showed Monday, in a sign that economic recovery momentum still remains weak amid the pandemic.

The nation's overall industrial production remained unchanged on-month in October, following a 2.2 percent on-month gain in September, according to the data compiled by Statistics Korea.

Compared with a year earlier, the industrial output fell 2.7 percent in October.

Production in the mining, manufacturing, gas and electricity industries declined 1.2 percent in October from the previous month, mainly because production of chips and liquid crystal displays (LCD) fell. It marked the first on-month decline in two months.

"Production in the manufacturing sector declined 1.3 percent on-month on falls in exports," Ahn Hyung-joon, a senior Statistics Korea official, said at a press briefing.

He said there was a decline in production of semiconductors due to the base effect as chip production sharply increased in August and September.

This file photo, taken June 4, 2020, shows stacks of import-export cargo containers at South Korea's largest seaport in Busan, 450 kilometers southeast of Seoul. (Yonhap)

Retail sales declined 0.9 percent from a month earlier, marking the first on-month decline in three months, and facility investment fell 3.3 percent on-month.

The data came after the country's industrial output, consumption and investment returned to growth in September following monthslong slumps amid the COVID-19 pandemic.

Consumption was hit hard by the lingering fallout of a flare-up in coronavirus cases though the country relaxed tougher virus curbs last month.

In October, the country eased social distancing measures by one notch to the lowest level on its previous three-tier scheme over a slowdown in COVID-19 cases after having been in effect for two months.

Sales of durable goods, such as cars, rose 2 percent on-month, but those of nondurable ones, such as food, plunged 5.7 percent, the data showed.

Production in the service sector, meanwhile, gained 1.2 percent from the previous month, the largest on-month growth in four months, as eased social distancing prompted people to use off-line services.

Still, policymakers expect a mild economic recovery as exports are improving.

Asia's fourth-largest economy grew 1.9 percent on-quarter in the third quarter, marking the first quarterly growth after two quarters of contraction, as exports rebounded amid eased global lockdowns.

The country's exports rose 11.1 percent on-year in the first 20 days of November as shipments of chips and autos increased.

The Bank of Korea (BOK) recently revised up its 2020 growth outlook to a 1.1 percent contraction from its previous forecast of a 1.3 percent retreat.

The so-called cyclical component of the composite leading index, which predicts the turning point in business cycles, rose by 0.4 point on-month to 101.8, on the back of a bull run in stock markets and improving consumer sentiment, according to Statistics Korea.

"Economic uncertainty remains high as COVID-19 cases re-surged and the country raised the social distancing measures," the finance ministry said in a statement.

On Nov. 24, the country raised virus curbs by one notch to Level 2, the third highest in its new five-tier system, in the Seoul metropolitan area for two weeks over a flare-up in virus infections.

This file photo, taken Oct. 6, 2020, shows citizens shopping for groceries at a discount store in Seoul. (Yonhap)

sooyeon@yna.co.kr
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