SEOUL– South Korea’s industrial output fell in September for the third month in a row, data showed Monday, with retail sales and facility investment also losing ground, hinting the country’s economic recovery may be losing steam.
Industrial production declined 0.6 percent on-month in September, following a 0.1 percent on-month decrease the previous month, according to the data from Statistics Korea. From a year earlier, however, the output rose 3.1 percent.
Output in the mining, manufacturing, gas and electricity industries fell 1.8 percent, due mainly to losses from sectors, such as chips and cars.
The statistics agency said the decrease also came as Typhoon Hinnamnor, which hit the country in early September, disrupted steel production.
“The output of chips also decreased due to the rising amount of inventories due to China’s lockdown coupled with the sluggish information technology industry,” said Eo Woon-sun, a senior Statistics Korea official.
The service output also lost 0.3 percent on-month in September due to losses from the wholesales and retail sector.
Retail sales, a gauge of private spending, decreased 1.8 percent on-month in September, as people spent less on non-durable goods, including foodstuffs, although they spent more on automobiles.
The retail sales rebounded after falling for the fifth consecutive month in August. The agency said the rebound of 4.4 percent in August came as consumers shopped early for the Chuseok holiday, which fell in early September.
The agency added sales of pharmaceutical products also decreased due to the falling number of COVID-19 patients.
Facility investment fell 2.4 percent on-month, compared with a 10.7 percent on-month growth in August, the data showed. The decrease mainly came as businesses spent less on purchasing machines.
South Korea saw its industrial output, retail sales, and investment fall all together for the first time since July.
The finance ministry, however, said the consumption and facility investment gained ground on-quarter in the July-September period, although the economic uncertainties remain high due to the U.S. Federal Reserve’s aggressive monetary tightening policy, and the prolonged war between Russia and Ukraine.
The so-called cyclical component of the composite coincident index, which reflects current economic situations, also advanced 0.1 point to 102.4, extending its gains to the fifth month, on the back of improved job data.
The cyclical component of the composite leading index, which predicts the turning point in business cycles, however, shed 0.1 to 99.2, due to the volatility in the financial market.
South Korea, meanwhile, has been grappling with inflation, with its consumer prices soaring 5.6 percent on-year in September.
The central bank has hiked its key policy rate by a combined 2.5 percentage points since August last year to curb inflation, including the second-ever big-step rate increase of 50 basis points to 3 percent early this month.
Source: Yonhap News Agency