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Korea Industry March 2021

Korea: Industrial output growth speeds up in March

Industrial output expanded 4.7% compared to the same month a year earlier in March, which followed February’s 0.9% increase, despite a still-unfavorable base effect. Notably, domestic-oriented manufacturing production rebounded after falling in the previous month.

On a monthly basis, industrial production fell 0.8% in seasonally-adjusted terms in March, which was notably below February’s 4.4% expansion. Meanwhile, the trend pointed down, with the annual average variation of industrial production coming in at minus 0.3%, down from February’s minus 0.1%. Meanwhile, average capacity utilization ebbed from the previous month.

Going forward, disruption in production at auto factories from the chip shortage poses a downside risk to industrial production.

However, Jeong Woo Park, economist at Nomura, said:

“While auto production will likely remain constrained by the chip shortage, it could be offset by solid chip production for non-automotive purposes, in our view.”

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