July Industrial Output Flat as Factory Production Rises, Services Slump

According to July economic indicators released by Statistics Korea on the 31st, factory production—centered on manufacturing—continued its upward trend, but overall industrial activity remained at levels similar to the previous month due to sluggishness in the service industry.

Production in all industries rose for two consecutive months in February (2.1%) and March (0.4%), but turned negative in April (-0.5%) and May (-0.4%). It subsequently rebounded into positive territory in June (2.4%), showing repeated fluctuations over recent months.

Mining and manufacturing production rose 0.2% from the previous month, continuing an upward trend for the second consecutive month following June (6.7%). Manufacturing output, which accounts for the majority of mining and manufacturing production, also increased by 0.2%. By sector, electronic components (20.7%), primary metals (4.2%), and pharmaceuticals (4.7%) led the increase.

Service industry production decreased by 1.3% from the previous month. The financial and insurance (-4.8%) and professional, scientific, and technical services (-2.7%) sectors were sluggish, and while information and communications (3.5%) increased, it failed to offset the overall decline.

Retail sales, a gauge of goods consumption, decreased 2.4% from the previous month, indicating a contraction in consumption. Construction completion fell by 1.1% from the previous month. Facility investment increased 7.5% from the previous month, marking the second consecutive month of growth following June (6.9%).

The cyclical component of the coincident index, which reflects the current economy, rose 0.8 points from the previous month, while the cyclical component of the leading index, which forecasts the future economy, also rose 0.4 points.