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Industrial production in October fell the most in a year and a half as production in the manufacturing and service industries declined side by side.
However, the Statistics Korea explained that it is too early to judge that the economic recovery has been weakened as there were two substitute holidays in October and the base effect on the strong production in September had an impact.
According to the Industrial Activity Trends of the National Statistical Office on the 30th, the index of all industrial production (excluding seasonal adjustments, agriculture, forestry and fisheries) in October was 110.8 (2015 = 100), down 1.9% from the previous month.
This is the largest decline since April last year (-2.0%).
All industrial production declined 0.7% and 0.1% in July and August, respectively, and then rebounded to 1.1% in September, but turned negative again in October.
By industry, mining and industrial production fell 3.0%, the largest decline since May last year (-7.7%) in one year and five months.
As a result, mining and industrial production continued to decline for the third consecutive month since August (-0.5%).
Manufacturing production, which accounts for a significant portion of mining and industrial production, fell 3.1%. As global supply chain disruptions continued, manufacturing production continued to decline for the fourth consecutive month since July.
In particular, production of automobiles (-5.1%) decreased due to disruptions in the supply and demand of semiconductors for vehicles, and primary metal production (-5.9%) also decreased due to the sluggishness of downstream industries such as automobiles.
Manufacturing inventories increased by 3.5%, showing an increase in semiconductors, etc.
The manufacturing industry’s inventory/shipment ratio (stock ratio) rose 7.5 percentage points to 121.0%.
“Considering that memory semiconductor prices have recently turned downward, we believe that the semiconductor industry is not as good as it was before,” said Eo Woon-seon, director of economic trend statistics at Statistics Korea.
The service sector, which increased by 1.4% in September, also turned to a decrease of 0.3% in October.
This is attributable to a decrease in financial product transactions, a fall in stock prices, and a decrease in financial and insurance production (-2.1%).
However, production of lodging and restaurants (4.5%), a representative face-to-face industry, continued to increase.
Public administration decreased by 8.9%. The decrease is the largest since March 2013 (-9.8%).
Construction fell 1.3%.
However, the retail sales index (seasonally adjusted), which shows consumption trends, was 121.5 (2015 = 100), up 0.2% from the previous month.
The retail sales index showed an upward trend for the second month following September (2.4%).
Sales of non-durable goods (-2.1%) such as cosmetics decreased, but sales of semi-durable goods (2.8%) such as clothes increased as demand for outdoor and winter clothing increased, and sales of durable goods (2.2%) such as heating appliances increased.
By business type, sales at passenger car and fuel retail stores (-3.7%) decreased compared to the same month last year, but specialized retail stores (11.2%), non-store retail (12.9%), department stores (22.8%), duty-free stores (15.0%), convenience stores (5.4%) ), hypermarkets (4.5%), supermarkets and general stores (1.7%).
Facility investment fell 5.4% as investment in transportation equipment such as machinery and ships decreased, and construction completion fell 1.3%.
The coincident index, which represents the current economy, fell 0.2 points to 101.0.
The cyclical variability of the leading index, which predicts the future economy, fell 0.5 point to 101.6.
The cyclical volatility of the coincident index has been on the decline for the second month, and the cyclical volatility of the leading index has been declining for the fourth month, respectively.
“The recent economic recovery has stalled as key indicators excluding consumption, such as production and investment, have weakened from the previous month,” said Eo Woon-seon, director of economic trend statistics at the National Statistical Office.
“I think uncertainty about the future economic trend is still high as uncertainty about the domestic corona is increasing and there are also downside factors such as disruptions in global supply chains and rising raw material prices,” he said.
“However, it is necessary to take into account the fact that the slump in October had a large base effect due to the decrease in the number of working days due to the designation of alternative holidays and the high September in September,” he said. emphasized.
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