September Production, Consumption, and Investment All Increased... Semiconductor Rebounds 12.9%

Statistics Korea 'September Industrial Activity Trends'
Production 1.1%, Consumption 0.2%, Investment 8.7%
Manufacturing and Mining Production

Cargo containers are piled up at Pyeongtaek Port. [Aerial photography cooperation = Seoul Metropolitan Police Agency Aviation Unit, Pilots: Inspector Shin Seung-ho - Inspector Park Ji-hwan, Crew: Inspector Park Sang-jin] Photo by Kang Jin-hyung aymsdream@

Last month, production, consumption, and investment indicators all increased. In particular, with signs of revival in the semiconductor sector, analysts suggest that the economy has officially entered a recovery phase.

According to the 'September Industrial Activity Trends' released by Statistics Korea on the 31st, last month's total industrial production (seasonally adjusted, excluding agriculture, forestry, and fisheries) rose by 1.1% compared to the previous month, with increases across manufacturing, services, public administration, and construction sectors.

The production increase was led by the semiconductor industry. Although manufacturing production decreased by 7.5% in automobiles last month, semiconductor production, including DRAM and flash memory, increased by 12.9%, resulting in an overall 1.8% rise. Production of semiconductor assembly equipment and flat panel display manufacturing machinery also increased, leading the machinery equipment sector to show a 5.1% growth.

Manufacturing inventories decreased by 2.2% compared to the previous month but increased by 7.9% compared to the same month last year. The average operating rate of manufacturing was steady at 73.2% compared to the previous month.

In the service sector, production rose by 0.4% overall, despite a 4.2% decline in arts, sports, and leisure, due to increases in wholesale and retail trade (1.7%) and transportation and warehousing (2.2%).

Retail sales increased by 0.2% from the previous month, driven by a 2.3% rise in non-durable goods such as food and beverages. Durable goods like telecommunications devices and computers fell by 2.3%, and semi-durable goods decreased by 2.8%.

Facility investment rose by 8.7% month-on-month, with increases in machinery such as special industrial machinery (7.3%) and transportation equipment including aircraft (12.6%). Construction performance increased by 2.5%, as civil engineering rose by 20% despite a 2.7% decline in building construction.

The coincident composite index, which reflects the current economic situation, fell by 0.1 points, while the leading composite index, which forecasts future economic conditions, rose by 0.1 points.

Kim Bo-kyung, Economic Trend Statistics Officer at Statistics Korea, stated, “In particular, manufacturing and industrial sectors show signs of economic recovery,” adding, “Although the coincident index fell, next month is expected to reflect the positive trends seen in August and September.”