Korea: Industrial production contracts in October
Industrial production, which includes output from the mining, manufacturing, and electricity and gas sectors, dropped 2.5% year-on-year in October, contrasting September’s 0.4% increase. This was mainly because output in the manufacturing sector—which accounts for the majority of industrial production—contracted sharply in October. Moreover, average annual variation in industrial production fell 1.0% in October, contrasting September’s 0.2% rise.
In month-on-month and seasonally-adjusted terms, industrial production fell 1.7% in October, contrasting the 2.0% increase in September. Meanwhile, the average factory capacity utilization rate slipped to 73.2% in October from 75.5% in the prior month.
Separately, the services sector grew 0.7% year-on-year in October, down slightly from September’s 1.0% expansion, due to less output in the wholesale and retail trade sector, while output increased faster in the information and communications sector.
Looking ahead, U.S.-China trade tensions and Korea’s own trade spat with Japan will likely hold back industrial production and the services sector. Nevertheless, a supportive fiscal stance, an expected recovery in global demand for tech and a bustling 5G network industry should prove supportive next year.