Annual growth of manufacturing production in South Korea's provincial areas eased in the third quarter as an indication of the slowing economy, the central bank said Friday.

Output by manufacturers in Korea's provincial regions grew a mere 0.4 percent in the July-September period from a year earlier, slowing from a 1.6 percent on-year gain in the second quarter, according to the Bank of Korea (BOK).

The BOK said that the production by automakers and machinery firms remained lackluster in the third quarter, but added that the manufacturing production in such areas seemed to improve to some degree in October.

Consumption tallied in provincial regions slightly improved compared with three months earlier, but the annual growth of consumption still remained weak.

Consumption made in such areas inched up 0.6 percent on-year in the third quarter, a turnaround from a 0.8 percent contraction in the second quarter, it said.

The data is an indication that the Korean economy is losing steam due to weak exports and sluggish domestic demand.

Korean firms are holding off on making investments and are hoarding cash due to the economic uncertainty while households are refraining from spending money amid high indebtedness. (Yonhap News)