Industrial Output and Capital Investment Increase
South Korea’s industrial output and capital investment increased and its consumption slightly decreased in May this year whereas the production, consumption and investment decreased without exception in the previous month. In May, both the cyclical component of leading index and the cyclical component of coincident index rose to signal an economic recovery. A continuation of the recovery, however, is still uncertain in view of external uncertainties such as financial market uncertainties and the war in Ukraine.
Statistics Korea announced on June 30 that South Korea’s secondary and tertiary industrial production index rose 0.8 percent to 117.1 in May. In March and April, the index rose 1.6 percent and fell 0.9 percent, respectively. In May, the index of the service sector rose 1.1 percent to lead the overall improvement. The index of the sector rose by more than 1 percent for the third consecutive month with COVID-19 subsiding and with the weather being good.
The mining and manufacturing production index rose 0.1 percent after a 3.3 percent fall in April. Specifically, the indices of machinery and equipment production, pharmaceutical production and automobile production rose 6.2 percent, 4.8 percent and 1.8 percent, respectively. That of electronic component production fell 13.8 percent.
On the spending side, capital investment increased 13 percent after having decreased for three months in a row. Construction investment increased 5.9 percent in May.
On the consumption side, the retail sales index fell 0.1 percent to 119.6. The index fell for three months in a row for the first time since the first quarter of 2020.
In May, the cyclical component of coincident index rose 0.1 point to 102.2 after having fallen in March and April. The cyclical component of leading index rose in 11 months and by 0.1 point to 99.4.