An Indicator of Slumping Economy
Industrial electricity use in South Korea decreased for the fourth consecutive month in July. Experts point out that the continuous decline signals another economic recession in that power consumption in the industrial sector is a good indicator of economic vitality. It accounts for more than half of the country’s total electric power demand.
Korea Electric Power Corp. (KEPCO) announced on Sep. 22 that its industrial electricity sales fell 0.8 percent on year in April, 1 percent in May, 1.8 percent in June, and 2.1 percent in July. The monthly sales showed a year-on-year decline five times this year alone, including 3.4 percent in February, whereas such a decline was witnessed once or twice a year from 2015 to 2018.
As of July this year, electricity for industrial use accounted for 57 percent of South Korea’s total electric power consumption. In general, a country’s electric power demand, that is, its electric power generation amount tends to be directly proportional to its GDP and, as such, a decline in industrial electricity demand is regarded as leading to a lower economic growth rate or an economic recession. For reference, South Korea’s manufacturing capacity has decreased for one year so far and its industrial production capacity fell 1.6 percent from a year ago in July this year.
In June and July this year, the total electricity sales of KEPCO fell 1 percent and 2.4 percent on year, respectively. Particularly in July, a very noticeable decline was witnessed in years in each of industrial, general and household electricity sales. This year, general electricity sales related to commercial facilities and self-employed businesses increased only in April and May.