Korea: Industrial production fails to gain traction in July
August 31, 2017
Industrial output growth recorded a meager 0.1% expansion in July over the same month last year. The reading contrasted June’s revised 0.5% decrease (previously reported: -0.3% year-on-year). Annual average growth in industrial production eased from 1.9% in June to 1.8% in July.
The weak result largely reflected a lackluster performance in manufacturing output, which declined 0.1% in July (June: -0.7% yoy), despite strong performances in the semiconductor and automobile sectors. Higher output in these industries, however, drove the average operation ratio from 71.2% in June to 73.4% in July, the best reading since January.
The month-on-month comparison gives a clearer picture of the underlying health of the sector. In July, factory output was up 1.9% over the previous month, which contrasted the 0.5% decrease seen in June. July’s figure was the highest in six months and was driven by new car production lines and the release of Samsung’s latest smartphone .
Author: David Ampudia, Economist