South Korea’s industrial activity drooped in October due to slump in the auto-making sector and softening retail sales and investment, suggesting fragility in the recovery in sectors beyond electronic components, government data showed.
According to Statistics Korea on Thursday, seasonally adjusted mining and manufacturing output in October slipped 1.1 percent on month, slowing from a 0.2 percent gain in the previous month. Against the same period in 2016, it was down 5.9 percent.
The weakening factory activity was mostly led by the sluggish automobile output that dropped 11.3 percent from a month ago. Metal processing also fell 5.9 percent.
Factory operation averaged at 71.3 percent, down 0.6 percentage point from a month earlier. Inventory levels rose 4.2 percent on month.
Service sector output dipped 1.7 percent, marking the largest fall since February 2011. Real estate sector plunged 15.2 percent due to the decreased house transactions, and wholesale and retail sectors slipped 3.6 percent amid sluggish auto sales hit by the long Chuseok holiday.
Retail sales - a barometer for private consumption - sank 2.9 percent, as non-durable goods like food products, durable goods like communication devices and semi-durable goods like clothing fell 3.6 percent, 2.0 percent and 2.1 percent, respectively.
Capital investment plunged 14.4 percent on month, driven by the huge fall in investment in machineries narrowing 17.9 percent.
The statistics office attributed the weak October figures to a base effect. “We found that it is a temporary correction, so the growth momentum is expected to continue,” an official from Statistics Korea said.
By Yoon Won-sup and Choi Mira
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]