The Korea Herald

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Korea's industrial output sinks 2.8% on-year in April

By 임정요

Published : May 31, 2016 - 09:40

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South Korea's industrial output fell for the second consecutive month and widened its downward pace in April due mainly to a sharp drop in the production of the auto and electronics parts sectors, a government report showed Tuesday.

Production in the mining, manufacturing, gas and electricity industries fell 2.8 percent last month from a year ago, according to the report by Statistics Korea. From a month earlier, industrial output also retreated 1.3 percent.

The April figure represents a contraction for two months in a row after it backtracked to a 0.6 percent on-year fall in March. In February, the country's industrial output rose 2.2 percent on-year.


Production in the service sector expanded 2.1 percent from a year earlier and improved 0.5 percent on-month.

For all industries, output inched up 0.8 percent in April from the same month in 2015 but fell 0.8 percent from a month earlier.

Sluggish car production led the decline, sinking 8.7 percent on-year, while the output of electronics parts, including displays, plunged 12.7 percent.

Production in the semiconductor and petroleum industries jumped 15.1 percent and 9.1 percent, respectively, to offset the sharp decline.

"As South Korea's exports have been in the doldrums for months, key industries, such as cars and electronics, can't help being at their low ebb," said Eo Woon-sun, director of the NSO's short-term industrial statistics division.

April's average plant utilization in the manufacturing sector reached 71 percent, down 2.7 percentage points from a month earlier.

Meanwhile, domestic consumption continued to increase last month to rise 4.2 percent on-year, following a four-month high of a 5.7 percent on-year jump in March, on the back of robust sales of durable goods like passenger cars.

From a month earlier, consumption edged down 0.7 percent after hitting a 4.2 percent on-month gain in March, the highest monthly figure since February 2009, when it hit 5 percent.

The South Korean government extended an excise tax cut program on passenger cars until June in a bid to repeat the brisk performance in October and November last year, when the consumption figures soared 8.6 percent and 6.2 percent, respectively.

"The production side is weak as exports and world trade remained in a slump. But we can say that domestic demand is in good form. We still have recovery momentum," the official said. "We expect better figures for the next months on better-than-expected outbound shipments data."

The country's exports have decreased for 16 straight months since January last year, the longest minus streak in history. But the latest customs data showed that outbound shipments rose 2.7 percent on-year for the first 20 days of May, raising hopes that they would end the record-long negative run.

The trade ministry will release such data on Wednesday.

The finance ministry said it will map out more aggressive fiscal plans to boost growth in the coming months.

"The government will put more policy efforts to expand the recovering momentum in the latter half of the year," the ministry said in a release. "We are also strengthening monitoring of the global financial and foreign currency markets to stave off any fallout of external risks." (Yonhap)