Industrial Production Falls as Construction and Mining & Manufacturing Decline
Automobile Output Drops 4.2% Due to U.S. Tariffs
Retail Sales Down 0.9%... Durable Goods Also Decrease
Facility Investment Down 0.4%, Construction Completion Down 0.7%
Last month, overall industrial production, retail sales, and facility investment all declined. This marks the first triple decrease in three months since January, reflecting a sluggish economic situation. The cyclical components of the coincident composite index and the leading composite index, which provide insight into the current economic trend and outlook, both showed a slight upward trend.
According to the "April 2025 Industrial Activity Trends" released by Statistics Korea on May 30, overall industrial production in April decreased by 0.8% compared to the previous month. After a drop in January (-1.6%), production had increased in February (0.7%) and March (0.9%), but fell again after three months.
Production declined across public administration, mining and manufacturing, services, and construction. In mining and manufacturing, production increased for machinery and equipment (2.6%), but decreased for automobiles (-4.2%) and semiconductors (-2.9%), both affected by U.S. tariffs. Looking at manufacturing alone, inventories remained flat compared to the previous month, but the average operating rate fell by 0.7 percentage points to 73.8%. This is the first decrease in the average operating rate in two months, since February (-0.7%).
Retail sales, which reflect consumption trends, decreased by 0.9%. After a decline in January (-0.6%), sales had increased in February (1.8%), but have now fallen for two consecutive months since March (-1.0%). This was due to decreased sales of semi-durable goods such as clothing (-2.0%), durable goods such as communication devices and computers (-1.4%), and non-durable goods such as pharmaceuticals (-0.3%).
Facility investment decreased by 0.4%. After a significant drop in January (-17.2%), investment appeared to recover in February (21.3%), but has now shown negative growth for two consecutive months since March (-0.6%). Investment increased in transportation equipment such as automobiles (9.9%), but decreased in machinery such as semiconductor manufacturing equipment (-4.5%).
Completed construction also decreased by 0.7%. After a decline in January (-4.5%), there was a brief recovery in February (3.0%), but declines continued in March (-5.0%) and again last month. Civil engineering increased (6.6%), but construction work decreased in building construction (-3.1%), resulting in an overall negative trend.
The cyclical component of the coincident composite index, which indicates the current economic situation, rose by 0.2 points to 98.9, marking three consecutive months of increase since February. The cyclical component of the leading index, which forecasts future economic trends, rose by 0.3 points to 100.9, also maintaining an upward trend for three consecutive months since February.
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