Industrial Activity Trends for November 2025
"Base Effect Compared to October and Chuseok Holiday"
Last month, consumption saw its largest decline in 21 months due to base effects. In contrast, production, investment, and construction indicators-especially those related to semiconductors-showed slight improvement, highlighting a mixed economic outlook.
According to the "November 2025 Industrial Activity Trends" released by the National Data Office on December 30, retail sales last month decreased by 3.3% compared to the previous month. This marks the largest decline in 21 months since February of the previous year (-3.5%). Retail sales had recorded negative growth in August (-2.4%) and September (-0.1%), but rebounded in October (3.6%) thanks to the Chuseok holiday and consumption coupons. However, due to base effects, they sharply declined again just one month later.
The sluggish consumption was observed across all product categories. Sales of non-durable goods, including food and beverages and pharmaceuticals, fell by 4.3% compared to the previous month. Sales of semi-durable goods, such as clothing and recreational, hobby, and sports goods, also decreased by 3.6%. Durable goods sales, including telecommunications devices and computers, declined by 0.6%. By business type, the decrease was particularly notable at large discount stores (-8.3%) and supermarkets and general merchandise stores (-4.8%). In contrast, non-store retail and passenger car and fuel retailers maintained an upward trend.
The primary reason for the sharp contraction in consumption is identified as the base effect from the surge in spending in October. Lee Dowon, Director of Economic Trend Statistics at the National Data Office, explained, "It's not so much that the effect of the livelihood recovery consumption coupons has disappeared, but rather that the reverse base effect from the surge in October and the shift in consumption timing had a significant impact." The long Chuseok holiday led to earlier purchases of food and beverages, and the early cold snap concentrated winter clothing sales in October, resulting in a decline last month.
The sharp rise in the won-dollar exchange rate is also cited as a factor constraining consumer sentiment. Lee noted, "As the exchange rate rises, the prices of imported consumer goods and overseas direct purchase items increase, which could reduce related consumption." However, he added that it is difficult to calculate the exact contribution. Regarding the impact of online shopping or specific platform issues, such as the Coupang hacking incident last month, he stated, "It is difficult to say that incidents that occurred in November were fully reflected in the indicators."
On the 17th, a banner announcing the "2026 Korea Grand Sale" was hung on Myeongdong Street in Jung-gu, Seoul. The Korea Grand Sale is Korea's representative shopping tourism festival, held since 2011 based on private sector participation in various fields such as aviation, accommodation, shopping, food and beverage, experiences, and convenience services to promote foreign tourists' visits and consumption during the off-season for inbound tourism. Especially this time, the event period has been moved up to December to allow more foreigners to benefit. 2025.12.17 Photo by Kang Jinhyung
Unlike consumption, production showed improvement, led by semiconductors. In November, total industrial production increased by 0.9% compared to the previous month. After a decline in August (-0.3%), it rebounded in September (1.3%), then dropped again in October (-2.7%), showing volatility, but returned to growth after just one month.
The recovery in production was driven by semiconductors and electronic components. Semiconductor production increased by 7.5% compared to the previous month, and the demand for mobile OLEDs rose due to strong sales of new mobile phones, resulting in a 5.0% increase in electronic components production. As a result, mining and manufacturing production increased by 0.6% compared to the previous month. Lee assessed, "There was a base effect due to the significant drop in semiconductor production last month, and factors such as the end-of-year and quarter-end effects and contract volumes have kept the semiconductor industry itself on a solid trajectory." Service sector production also supported the increase in total industrial production, rising by 0.7%, mainly in finance and insurance, as well as association, repair, and personal services.
Investment indicators also rebounded slightly. Facility investment increased by 1.5% compared to the previous month. While the base effect from the sharp 14.1% drop in October was significant, investment in machinery, such as general industrial machines, increased by 5.0%, driving the overall growth. Construction completion, which reflects construction industry output (in constant terms), rose by 6.6% compared to the previous month due to increased building construction performance. The expansion in both residential and non-residential construction volumes contributed to this result.
Overall, the three key industrial activity indicators-production, retail sales, and facility investment-were all heavily affected by base effects, making it difficult to accurately assess the economic trend.
Economic sentiment indicators also continued to show mixed signals. The coincident composite index, which reflects the current state of the economy, fell by 0.4 points from the previous month, marking two consecutive months of decline. The drop was mainly due to decreases in the domestic shipment index, mining and manufacturing production, and construction completion. On the other hand, the leading composite index, which predicts future economic trends, rose by 0.3 points compared to the previous month. This improvement was attributed to some leading indicators, such as the KOSPI index and interest rate differentials. Lee commented, "We are watching to see if the rebound since the beginning of the year will continue, but as the recovery in construction and domestic shipments is still not clear, the improvement in the economic trend is being delayed."
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