Domestic Supply in Manufacturing Up 1.1% in Q4... Growth Trend Continues

Statistics Korea, Q4 and Annual Domestic Supply Trends in Manufacturing Industry

[Asia Economy Reporter Kim Hyun-jung] In the fourth quarter of last year, the volume supplied domestically in the manufacturing sector continued its upward trend following the previous quarter. The increase was driven by improvements in facility investment, although production activities remained relatively sluggish.

According to the '4th Quarter and Annual Domestic Supply Trends in Manufacturing' released by Statistics Korea on the 7th, the domestic supply index for manufacturing in the fourth quarter of this year was 109.4, marking a 1.1% increase compared to the previous year. The manufacturing domestic supply index quantifies the value of products produced domestically or imported into the country, representing the scale of the domestic manufacturing-related market.

Domestic supply in manufacturing decreased consecutively in the first (-3.9%) and second (-0.8%) quarters of this year, rebounded in the third quarter (1.5%), and continued to increase thereafter. Other transportation equipment (154.3%) and machinery equipment (3.6%) increased, leading to a 1.7% rise in domestic products, while imports decreased by 0.7% due to declines in machinery equipment (-12.0%) and chemical products (-8.2%). This reflects a continued easing of the domestic demand following the previous quarter. Statistics Korea explained, "In the case of other transportation equipment, large-scale ships ordered were constructed, increasing ship investments by domestic shipping companies," adding, "The upward trend is expected to continue as construction proceeds."

By product type, final goods increased by 7.7%, while intermediate goods decreased by 3.2%. For final goods, consumer goods declined by 0.4% due to reductions in portable phones and frozen fish, whereas capital goods rose by 21.3% driven by increases in container ships and other semiconductor equipment. Intermediate goods saw decreases in TV LCDs and automobile parts. By industry, primary metals (-5.3%) declined, but notable increases were seen in other transportation equipment (154.3%) and machinery equipment (3.6%).

The share of imports in domestic manufacturing supply in the fourth quarter was 25.5%, down 0.4 percentage points from the same period last year. The import share of final goods was 26.2%, decreasing by 1.8 percentage points from last year, while intermediate goods rose by 0.3 percentage points to 25%. By industry, import shares decreased in machinery equipment (26.5%), other transportation equipment (10.7%), and petroleum refining (27.5%), but increased in electronic products to 59.3%.

On an annual basis, domestic manufacturing supply last year decreased by 0.5% compared to the previous year as domestic products declined despite an increase in imports. Domestic products fell by 1.1% due to reductions in medical precision optics and machinery equipment, while imports increased by 1.0% driven by electronic products and primary metals. By product type, final goods supply decreased by 0.9%, and intermediate goods supply decreased by 0.2%. Consumer goods increased by 0.8%, but capital goods declined by 3.4%, continuing a negative trend for the second consecutive year following last year's -5.6%. Intermediate goods also decreased by 0.2%.

By industry, machinery equipment (-8.6%) and electrical equipment (-5.7%) declined, while other transportation equipment increased by 36.8%. The import share last year was 26.3%, up 0.5 percentage points from the previous year. By industry, the shares of electronic products (53.3% → 56.4%), medical precision optics (42.9% → 47.8%), and electrical equipment (23.5% → 26%) increased compared to last year, while machinery equipment decreased (31.5% → 28.8%).

This content was produced with the assistance of AI translation services.