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(LEAD) Industrial output grows for 2nd month in March amid recovery hopes

Finance 08:29 April 30, 2021

(ATTN: UPDATES with more details from para 4; ADDS photo)
By Kim Soo-yeon

SEOUL, April 30 (Yonhap) -- South Korea's industrial output grew for the second straight month in March, data showed Friday, in the latest sign that Asia's fourth-largest economy is on a recovery path.

The industrial output increased 0.8 percent in March from the previous month, slowing from a 2.1 percent on-month gain in February, according to the data compiled by Statistics Korea.

From a year earlier, it also rose 5.8 percent.

But output in the mining, manufacturing, gas and electricity industries declined 0.8 percent on-month in March as some automakers temporarily suspended operations amid a global shortage of automotive chips.

This file photo, taken March 2, 2021, shows ships carrying containers docking at a port in South Korea's southeastern city of Busan. (Yonhap)

Service output rose for the second straight month in March as people increased activity amid warm weather and relaxed social distancing rules.

Service production gained 1.2 percent on-month in March, the sharpest gain since June 2020.

Retail sales, a measure of private spending, also rebounded last month, affected by increased sales of goods, such as clothes and cosmetics.

Retail sales rose 2.3 percent from a month earlier, compared with a 0.8 percent on-month decline in February, the data showed. The March reading marked the largest on-month gain since August 2020.

Facility investment remained unchanged last month, following a 2.2 percent on-month fall in February.

"Major economic data improved from a month earlier, underscoring that momentum for an economic recovery has expanded," Eo Woon-sun, a senior Statistics Korea official, told reporters.

The South Korean economy is on a recovery track on the back of robust exports.

Asia's fourth-largest economy grew 1.6 percent in the first quarter from three months earlier, accelerating from a 1.2 percent on-quarter gain in the fourth quarter of last year, according to the Bank of Korea (BOK). It contracted 1 percent last year due to the new coronavirus outbreak.

The country's exports, which account for half of the economy, increased 16.6 percent on-year in March to extend their gains for the fifth consecutive month. Overseas shipments soared 45.4 percent on-year in the first 20 days of April.

BOK Gov. Lee Ju-yeol has said the country's growth rate for this year will likely reach the mid-3 percent range. Finance Minister Hong Nam-ki laid out a brighter outlook Tuesday, penciling in a growth rate in the 3.5-3.9 percent range.

The speed of the vaccine rollout and a flare-up in COVID-19 cases are cited as major downside risks on the economy. Health authorities said they will accelerate the inoculation campaign to achieve herd immunity by November.

This file photo, taken April 5, 2021, shows people visiting Lotte Department Store in central Seoul during its spring sale event. (Yonhap)

sooyeon@yna.co.kr
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