(2nd LD) Industrial output up 0.5 pct in Jan.; retail sales down for 3rd month

Economy 09:32 March 02, 2023

(ATTN: UPDATES with more info throughout; ADDS photo)
By Kang Yoon-seung

SEOUL, March 2 (Yonhap) -- South Korea's industrial output edged up 0.5 percent on-month in January, while retail sales extended losses to a third month, data showed Thursday.

The latest rise in the industrial production came after the figure remained unchanged the previous month, according to the data from Statistics Korea.

The industrial output earlier shed 1.2 percent and 0.4 percent on-month in October and November, respectively.

The rebound came as the combined output in the mining, manufacturing, gas and electricity industries advanced 2.9 percent on-month in January. The output from the communication device sector especially doubled over the period.

A Statistics Korea official holds a press conference in the central city of Sejong on March 2, 2023. (Yonhap)

The automobile industry also saw its output increase 9.6 percent, it added.

The growth, however, was limited as production from the chip industry, the backbone of Asia's No. 4 economy, shed 5.7 percent over the period amid falling global demand.

The service output rose 0.1 percent on-month in January, led by the retail and wholesale industries, which moved up 3.7 percent. The output from the finance and insurance businesses, on the other hand, slipped 5 percent.

Retail sales, a gauge of private spending, decreased 2.1 percent due to the weaker demand for semidurable goods and foodstuffs.

The statistics agency added sales of winter clothes decreased on-month in January as a result of warmer-than-usual weather.

"In 2021, retail sales, led by durable goods, shot up following the COVID-19 pandemic. However, since last year, consumption has shifted towards the service sector as outdoor activities have returned to normal," an official from the statistics agency said.

Facility investment shed 1.4 percent on-month in January, the data also showed.

The investment made by the machinery industry fell 6.9 percent on-month, although that of the automobile sector moved up 15.9 percent.

Starting this month, the base year for the industrial output data is set at 2020, instead of the previous 2015.

As for the rest of 2023, the finance ministry said in a separate report that the reopening of the Chinese economy, and eased concerns over the advanced economies, including the United States and the eurozone, are expected to lend a hand to the industrial output.

The sluggish exports of chips, on the other hand, will continued to weigh on South Korea's economy, it said.

The easing of regulations applied to incoming Chinese travelers and the lifting of local mask mandates are expected to support retail sales, although the uncertainties of the monetary policies of major countries still pose risks, it added.