Statistics Korea announced on June 28 that South Korea’s total industrial production fell 0.5 percent in May this year and its production index, which dropped by 2.7 percent in February this year, fell again that month after rising in March and April, led by mining and manufacturing’s 1.7 percent decline in production. In May, the industrial output fell 14 percent and 3.6 percent in the petroleum refining and metal processing sectors, respectively.
These days, South Korea’s manufacturing output is showing a downward tendency. For instance, the manufacturing sector’s inventory-to-shipment ratio reached 118.5 percent in May, an all-time high since 122.9 percent of September 1998. Likewise, its production capacity index reached 101.4, a record low since 101.1 of April 2016. The index showed a year-on-year decline for 10 months in a row until May to post the longest downtrend since records began in 1971.
The capital expenditures decreased 8.2 percent from the previous month, too. Investment in machinery fell 6.5 percent, led by that in semiconductor manufacturing equipment, and investment in transport equipment dropped 13.5 percent. The value of construction completed edged down 0.3 percent month on month, led by a decline in civil engineering and construction works.
The cyclical component of coincident index, which shows the current economic status, rose 0.2 point in one month to 98.6, showing an upward movement in 14 months. Meanwhile, the cyclical component of leading index for future prediction fell 0.2 point to 98.1 after rebounding 0.1 point in 11 months in April. Seven out of the eight component indices decreased, including the KOSPI index and the export-import price ratio.