Due to the Impact of COVID-19, Domestic Supply in Manufacturing Decreased by 4.6% in Q2

'2020 2Q Domestic Supply Trends in Manufacturing Industry'

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Due to the COVID-19 pandemic, domestic supply in the manufacturing industry recorded a negative growth rate in the second quarter for the first time in four quarters.

According to the '2020 2nd and 4th Quarter Manufacturing Domestic Supply Trends' announced by Statistics Korea on the 7th, the manufacturing domestic supply index in the second quarter decreased by 4.6% compared to the same period last year. This is the largest decline since a 5.5% decrease in the third quarter of 2018.

Manufacturing domestic supply is an index of the supply amount of manufacturing products produced domestically or supplied domestically through overseas imports.

This is the first time in four quarters that manufacturing domestic supply has recorded a negative growth rate compared to the same quarter of the previous year since the second quarter of last year, which was -1.0%. The -4.6% growth rate in manufacturing domestic supply in the second quarter is the second lowest ever, following the -5.5% in the third quarter of 2018.

By category, final goods increased by 4.9% compared to the second quarter of last year. Among final goods, consumer goods rose by 1.2%, supported by strong automobile sales due to the reduction of individual consumption tax.

Intermediate goods decreased by as much as 10.4% compared to the second quarter of last year. This is the lowest growth rate for intermediate goods domestic supply since 2010.

Kim Bo-kyung, head of the Industrial Trends Division at Statistics Korea, explained, "Due to the impact of COVID-19, domestic manufacturing production has contracted, leading to a significant decrease in the supply of intermediate goods used in production."

Meanwhile, among capital goods, 'Other Transport Equipment,' which includes ships, recorded a relatively high growth rate of 42.1% in the second quarter as well.