Production, Consumption, and Investment All Show 'Triple Decline' in 5 Months... Slow Economic Recovery (Update)

Statistics Korea, October Industrial Activity Trends

The three major indicators showing industrial activity?industrial production, retail sales, and investment?all declined simultaneously last month. The leading index, which forecasts future economic conditions, also fell.

According to the "October 2024 Industrial Activity Trends" released by Statistics Korea on the 29th, total industrial production decreased by 0.3% compared to the previous month.

Total industrial production had consecutively declined in May (-0.8%), June (-0.1%), and July (-0.6%), then turned to an increase in August (1.1%), but continued a two-month negative streak with a decrease in September (-0.3%).

By sector, industrial production increased in the service industry (0.3%), but decreased in public administration (-3.8%) and construction (-4.0%). The mining and manufacturing sector remained flat.

Within mining and manufacturing, production decreased in automobiles (-6.3%) but increased in semiconductors (8.4%) and medical precision optics (4.0%).

Manufacturing inventories rose by 1.2% compared to the previous month, and the average operating rate fell by 0.9 percentage points to 72.5%.

Consumption indicators continued their negative trend from the previous month. Retail sales, which reflect consumption trends, decreased by 0.4% month-on-month. Sales increased in semi-durable goods such as clothing (4.1%) and non-durable goods such as food and beverages (0.6%), but decreased in durable goods such as home appliances (-5.8%).

Facility investment declined by 5.8% compared to the previous month, with reductions in machinery such as semiconductor manufacturing equipment (-5.4%) and transportation equipment such as automobiles (-7.2%).

Construction performance decreased by 4.0% month-on-month, with declines in civil engineering (-9.5%) and building construction (-1.9%).

Domestic machinery orders fell by 10.6% year-on-year, with decreases in both public (-21.4%) and private (-10.1%) sectors. Construction orders (current) increased in civil engineering such as railroads and tracks (34.3%) but decreased in building construction such as offices and stores (-22.9%), resulting in an 11.9% year-on-year decline.

The coincident index, which reflects the current economic situation, remained unchanged at 98.1 from the previous month (98.1), while the leading index, which forecasts future economic conditions, fell by 0.1 points to 100.6 compared to the previous month.