South Korea's industrial output shrank in May from a month earlier amid heightened global economic uncertainty, a government report showed Friday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries shrank 0.4 percent last month from a month earlier. From a year earlier, it also fell 1.4 percent.

The drop came a month after the output turned around from four previous months of contractions. The output in the service sector still edged up 0.2 percent on-month in May, the report showed.

The latest production figures come amid concerns that the country's economy might be losing traction in the face of toughened market conditions at home and abroad. South Korea's gross domestic product grew by less than 1 percent during the past eight straight quarters.

The government has engaged in various stimulus efforts over the past months including a 17.3 trillion won (US$14.99 billion) supplementary budget and a set of policies aimed at boosting the slumping property market along with measures to boost investment in the corporate sector.

The country's central bank also slashed its benchmark interest rate by 0.25 percentage point in May in an apparent bid to help the government effort to keep the economy going.

On Thursday, the government revised upward its growth outlook for this year from 2.3 percent to 2.7 percent, saying those stimulus polices might be paying off in propping up the economy.

The growth upgrade comes despite heightened global market uncertainties prompted by worries that the U.S. could start to scale back its stimulus plan later this year and the economic growth in China might be slowing down.

Murky global market conditions are feared to weigh on exports, which account for more than a half of South Korea's economic growth.

The statistics report showed that the manufacturing sector saw their output shrink 0.4 percent in May from a month earlier due to a decrease in production of transportation equipment and semiconductors. From a year earlier, the output also dropped 1.5 percent.

The average facility operating ratio in the manufacturing sector also inched down to 75.4 percent in May from the revised 75.5 percent in April.

Private-sector spending remained weak. The report showed that retail sales declined 0.2 percent on-month in May, thought it rose 0.5 percent from a year earlier.

Facility investment rebounded in May by growing 1.2 percent on-month but from a year earlier, the investment dropped 11.6 percent, according to the report. (Yonhap News)