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(2nd LD) Industrial output falls by most in 30 months in October

All News 09:18 November 30, 2022

(ATTN: UPDATES with details in last 3 paras)
By Kang Yoon-seung

SEOUL, Nov. 30 (Yonhap) -- South Korea's industrial output fell by the most in 30 months in October, data showed Wednesday, with retail sales also losing ground amid the prolonged economic uncertainties.

Industrial production declined 1.5 percent on-month in October, following a 0.4 percent on-month decrease the previous month, according to the data from Statistics Korea.

It marked the largest drop since the 1.8 percent decrease tallied in April 2020 in the wake of the COVID-19 pandemic. The output also fell for the fourth consecutive month, the data showed.

From a year earlier, the output advanced 2.8 percent.

Output in the mining, manufacturing, gas and electricity industries fell 3.5 percent on-month in October, due mainly to a decline in production in the automobile and machine sectors.

The service output also went down 0.8 percent on-month in October, the sharpest drop since the 1 percent decrease posted in December 2020.

"The output from the mining and manufacturing industries were sluggish, and the service production and retail sales slowed, leading to the weaker recovery and improvement of the economy," said Eo Woon-sun, a senior Statistics Korea official.

Retail sales, a gauge of private spending, decreased 0.2 percent on-month in October, and facility investment remained nearly unchanged from a month earlier, the data showed.

Eo said the industrial output may further lose ground, especially in the manufacturing sector for export products.

"The key issue is whether domestic demand will maintain a recovery. But as the prices still remain high, and interest rates are rising, the uncertainties are high for the future economic trend," Eo added.

South Korea has been grappling with inflation, with its consumer prices soaring 5.7 percent on-year in October.

The central bank has hiked the rate by a combined 2.75 percentage points since August last year to tame inflation. The rate currently stands at 3.25 percent.

The finance ministry said the weak exports, coupled with the on-going strike by truckers, may weigh on the industrial output down the road.

Thousands of truckers launched the strike last Thursday, demanding the government extend temporary rules guaranteeing minimum freight rates set to expire at the end of this year. The government invoked a return-to-work order on cement truckers the previous day amid disruptions in the supply chain.

The ministry added that the impact of the crowd crush in Itaewon in late October, which claimed 158 lives, may also continue to hurt private spending.

Containers are unloaded at a port in Busan, 325 kilometers south of Seoul, in this file photo taken Nov. 21, 2022. (Yonhap)

Containers are unloaded at a port in Busan, 325 kilometers south of Seoul, in this file photo taken Nov. 21, 2022. (Yonhap)


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