Korea: Industrial production contracts in August
Industrial production decreased 2.9% year-on-year in August, contrasting July’s 0.6% rise. The average annual variation in industrial production was minus 0.3% in August, contrasting July’s 0.3% increase.
Output in the manufacturing sector—which accounts for the majority of industrial production—contracted in August after July’s mild rebound—partly due to weaker vehicle—related production levels. August’s slump was driven by a fall in domestic demand, while exports softened. Meanwhile, the average factory capacity utilization rate fell to 73.8 in August from 74.8 in the prior month.
In month-on-month seasonally adjusted terms, industrial production fell 1.4% in August, contrasting an increase of 2.8% in July.
August’s print marked the sharpest contraction since February 2019, and reversed the positive momentum posted in June-July. That being said, the service industry gained momentum in August on the back of a rebound in durable goods consumption, mainly due to new product launches in the auto industry. Moreover, consumption gained momentum, while investment was robust in August which bodes well for growth in H2.