Korea Industry August 2016


Industrial production quickens in August, sequential data reflects strike

In August, industrial production accelerated and expanded 2.3% year-on-year, which was up from both the 1.6% increase registered in July and the 1.6% rise the markets had expected. This result was the fourth month of increase in industrial output following several months of erratic growth. Due to the strong annual increase, the trend suggests that a gradual recovery remains in place. The annual average growth in industrial output rose from 0.2% in July to 0.6% in August.

Looking at the details, manufacturing output increased 2.3% annually in August, overshooting the 1.7% expansion recorded in July. Construction sustained another double-digit increase (August: +23.6% year-on-year; July: +19.8% yoy) and the service industry sub-category gained momentum (August: +4.7% yoy; July: +3.0% yoy).

However, a month-on-month comparison showed that Korea’s factory output tumbled in August. It decreased a seasonally-adjusted 2.4% over the previous month, which contrasted the 1.3% increase in July. The drop mainly reflected a sharp decline in automobile production due to strikes in the car industry.

Growth in industrial output is gradually stabilizing, following a contraction in 2015. FocusEconomics Consensus Forecast panelists expect industrial production to remain flat in 2016, which is down 0.2 percentage points from last month’s forecast. For 2017, panelists expect industrial output to increase 1.5%.

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Korea Industry Chart

Korea Industry August 2016

Note: Year-on-year and annual average var. of industrial production index in %.
Source: Korea National Statistics Office (KOSTAT).

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