Bank of Korea's Economic Trend Monitoring for the First Quarter of This Year
Manufacturing Declines in Sectors Such as Petrochemicals and Steel, Except for Automobiles
Construction Investment Decreases Amid Sluggish Pre-sale Market
Bank of Korea Gwangju Jeonnam Headquarters.
In the first quarter of this year, all sectors?manufacturing, services, and construction investment?in the Honam region declined, resulting in a slight economic slowdown compared to the fourth quarter of last year.
According to the Gwangju-Jeonnam branch of the Bank of Korea on the 24th, an economic trend monitoring survey conducted by the branch, along with the Jeonbuk and Mokpo branches, targeting local companies and related organizations, found that the Honam region's economy slightly slowed down in the first quarter of this year compared to the fourth quarter of last year.
In terms of production trends, manufacturing saw a slight decrease, and the service sector also declined. On the demand side, both private consumption and exports declined slightly, and construction investment also decreased. Facility investment remained at the same level as the previous quarter.
By industry within manufacturing, automobiles saw a slight increase, but petrochemicals, steel, semiconductors, and petroleum refining all slightly decreased. Shipbuilding remained at the same level as the previous quarter.
Automobiles posted a slight increase due to a base effect from decreased production caused by supplier strikes in the fourth quarter of last year, despite fewer working days during the Lunar New Year holidays. Petrochemicals declined slightly due to the suspension of some production lines amid worsening profitability and continued oversupply from China. Steel was affected by a downturn in the construction industry, while semiconductors saw a reduction in shipments for smartphones and automobiles.
Construction investment in the first quarter of this year declined compared to the fourth quarter of last year. In the private sector, construction costs rose due to higher raw material prices and labor costs, while the area of new construction and the pre-sale market both shrank, leading to a decrease. In the public sector, construction investment saw a slight increase as SOC budget execution grew.
From January to February of this year, the number of employed persons (-35,000) continued to decrease year-on-year, mainly in the service sector, but the overall decline was smaller than in the fourth quarter of last year (-39,000). By industry, manufacturing saw a larger increase, agriculture, forestry, and fisheries saw a smaller decrease, while the service sector saw a larger decrease.
The consumer price inflation rate was 2.2% from January to February, marking an increase, while housing sales prices fell by -0.06% in January-February this year, a greater decline than in the fourth quarter of last year (-0.04%). Jeonse prices also shifted to a decline, from 0.02% in the fourth quarter of last year to -0.02% in January-February this year.
By region, Jeonse prices rose in Gwangju, turned downward in Jeonbuk, and continued to decline in Jeonnam.
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