Seoul: South Korea's economy continues to face concerns due to a delayed recovery in construction investment and slowing exports, but positive signs, including improved consumer sentiment, continue to strengthen, the finance ministry said Friday.

According to Yonhap News Agency, in its latest monthly economic assessment, known as the Green Book, the Ministry of Economy and Finance highlighted ongoing concerns -- the delay in the recovery of construction investment, employment difficulties in vulnerable sectors, and a slowdown in exports due to U.S. tariff measures.

Despite such challenges, the ministry pointed to "positive signs" for the second consecutive month, suggesting the economy may be on a path to gradual recovery. "Increased consumption due to policy effects are strengthening positive signs for economic recovery," the report noted.

In July, retail sales, a gauge of private spending, went up 2.5 percent from a month earlier, representing the sharpest on-month increase since February 2023. The ministry said the government will make every effort to swiftly implement the supplementary budget, which includes the second batch of cash handouts known as "consumption coupons," as well as organize sales events ahead of the extended Chuseok holiday.

In July, industrial production edged up 0.3 percent to mark the second month of modest growth, while facility investment saw a sharper increase, gaining 7.9 percent from the previous month. This marks a rebound following four consecutive months of decline through June. Meanwhile, the labor market continued to show some resilience, with 166,000 jobs added in August, the report noted.

However, job losses persisted in the manufacturing and construction sectors, while youth employment remained sluggish. Exports rebounded in August, growing 1.3 percent from a year earlier to US$58.4 billion on the back of robust global demand for semiconductors, despite the tariff scheme of the administration of U.S. President Donald Trump.

Nonetheless, concerns remain over a continued slowdown in the construction investment and lingering trade uncertainty for the country's export-dependent economy. "The global economy faces continued volatility in international financial markets and concerns over slowing trade growth due to deteriorating trade conditions, including major countries imposing tariffs," the report said.