August Industrial Production Rebounds 1.2%... Consumption Hits 18-Month High (Update)

Statistics Korea Industrial Activity Trends

Last month, industrial production rebounded for the first time in four months due to increased production of automobiles and semiconductors. Retail sales also showed a recovery, recording the highest growth rate in 18 months.

According to the "August 2024 Industrial Activity Trends" released by Statistics Korea on the 30th, total industrial production last month increased by 1.2% compared to the previous month. This broke the negative trend that had continued since May (-0.8%) and turned positive after four months.

Looking at industrial production by sector, production decreased in public administration (-1.2%) and construction (-1.2%), but increased in mining and manufacturing (4.1%) and services (0.2%).

Within mining and manufacturing, production declined in telecommunications and broadcasting equipment (-7.1%), but increased in automobiles (22.7%) and semiconductors (6.0%).

Manufacturing inventories rose by 1.4% compared to the previous month, and the average operating rate increased by 3.2 percentage points to 74.3%.

Consumption indicators turned positive. Retail sales, which reflect consumption trends, increased by 1.7% compared to the previous month. Sales decreased in semi-durable goods such as shoes and bags (-0.9%), but increased in non-durable goods such as food and beverages (2.7%) and durable goods such as passenger cars (1.2%).

Facility investment decreased by 5.4% compared to the previous month, as investments declined in transportation equipment such as other transport equipment (-15.4%) and machinery such as semiconductor manufacturing equipment (-1.0%).

Domestic machinery orders increased in the public sector (102.5%) but decreased in the private sector (-8.6%), resulting in a 2.9% decrease compared to the same month last year. Construction performance rose in civil engineering (2.4%) but fell in building construction (-2.4%), leading to a 1.2% decrease compared to the previous month.

Construction orders increased in both civil engineering such as roads and bridges (24.3%) and building construction such as factories and warehouses (2.6%).

The coincident index of economic indicators, which reflects the current economy, stood at 98.2, down 0.1 points from the previous month. The leading index of economic indicators, which forecasts future economic conditions, was 100.6, down 0.1 points from the previous month.