Economic Indicators Show
Korea’s composite index of coincident indicators, which shows the current economic situation, fell for the sixth consecutive month in September, implying that the South Korean economy has entered a slowdown phase. Both production and consumption decreased along with capital expenditures, with the only exception of the semiconductor industry.
According to Statistics Korea on Oct. 31, the overall industrial production of South Korea fell 1.3% month on month in September, showing the steepest decline since March 2013. The rate of decrease amounted to 4.8% in the automobile sector and 7.8% in electronic components. Likewise, wholesale and retail production decreased by 2.0%.
On the consumption side, retail sales showed a decline of 2.2% as automobile sales dropped 12.4% in spite of a cut in special consumption tax. Capital expenditures increased, for the first time in seven months, by 2.9% thanks to the newly built SK Hynix plant in Cheongju, but the expenditures excluding that case fell no less than 19.3% from a year earlier. The value of construction completed went down by 3.8%, too.
The coincident index fell 0.3 points to 98.6, the lowest since June 2009. The six-month back-to-back decline is for the first time since the period of November 2015 to April 2016, when the South Korean economy took a serious hit amid a spread of MERS and China’s economic retaliation for THAAD deployment. A decline of the coincident index for six months in a row means that the economy is slowing down.