Industrial Output in May Falls 1.2% on Month
Statistics Korea announced on June 30 that South Korea’s overall industrial production fell 1.2 percent in May from a month earlier.
South Korea’s retail sales increased 4.6 percent month on month in May after another increase in April. Retail sales have rebounded to the pre-COVID-19 level based on government policies and the rebound improved the service industry output, which edged up 0.5 percent in April, by 2.3 percent in May.
On the other hand, the mining and manufacturing industry output fell 6.7 percent in April and May each, showing the steepest decline since December 2008 for two months in a row. Likewise, the average manufacturing capacity utilization fell 4.6 percentage points to 63.6 percent, the lowest since January 2009. Capital expenditures and the value of construction completed fell 5.9 percent and 4.3 percent, respectively.
In the meantime, the Bank of Korea announced on June 30 that the overall business survey index (BSI) of South Korean industries rose three points to 56 last month. Although the BSI rose for the second consecutive month, led by non-manufacturers that benefited from the improved retail sales, the absolute numerical value of 56 is even lower than the index recorded in March 2009 immediately after a global financial crisis. The BSI, which indicates enterprises’ economic condition assessment, has a reference value of 100 and last month’s BSI means that a very large number of enterprises are skeptical about current economic conditions.
The cyclical component of coincident index fell 0.8 point to 96.5 in May this year. It is the lowest since January 1999. Besides, the cyclical component of economic sentiment index fell 5.2 to a record low of 56.4 last month.