Manufacturing Sector and Investment Still Sluggish
The Korea Development Institute (KDI) said in its report on Jan. 8 that the growth of the South Korean economy still remains slow although some indices are indicating the possibility of an economic recovery.
According to the KDI, consumption and service output growths increased and leading economic indicators improved in November last year. Specifically, retail sales, which increased 2 percent in October, rose 3.7 percent in November with durable goods consumption and non-durable goods consumption going up 3.9 percent and 5.3 percent, respectively. Likewise, the service output growth jumped from 0.8 percent to 2.5 percent, led by the sectors including healthcare and insurance. The consumer sentiment index was at 100.4 above its reference value.
In addition, the mining and manufacturing sales degrowth decreased from 2.1 percent to 0.3 percent with the semiconductor production growth increasing from 11.7 percent to 30.9 percent. The cyclical component of leading index, which indicates future economic conditions, edged up from 98.8 to 99.2.
Still, the KDI explained that the manufacturing sector and investment are still sluggish. “In November, capital expenditures showed no increase in spite of a base effect and the decrease in construction investment rose from 3.7 percent to 4.7 percent,” it said, adding, “The manufacturing inventory ratio edged up from 115.6 percent to 116.3 percent and the average capacity utilization fell from 73.3 percent to 71.8 percent.”