Strong Semiconductor and Machinery Equipment Boost Fourth Quarter Light Industry Production Rebound

On an annual basis, sluggish trend... Nationwide down 0.7% compared to last year

[Asia Economy Reporter Kim Hyunjung] The industrial production growth rate in the fourth quarter of last year turned positive for the first time in four quarters. With increases in semiconductors and machinery equipment, an improving trend was observed mainly in Gyeonggi and Daejeon, where Samsung and SK Hynix production facilities are located. However, on an annual basis, the performance remained sluggish.

According to the '2019 Fourth Quarter and Annual Regional Economic Trends' released by Statistics Korea on the 21st, the industrial production index, including mining, manufacturing, and electricity and gas industries, increased by 0.6% compared to the same quarter of the previous year. This marked a shift to growth in the fourth quarter after three consecutive quarters of negative growth from the first to the third quarter.

By region, production increases were notable in Gyeonggi (13.9%) and Daejeon (10.3%), with Sejong (4.8%), Jeonnam (4.5%), and Jeju (3.5%) also seeing production growth. In Gyeonggi, machinery equipment production surged by 91.0%, and electronic components, computers, video, and audio increased by 17.9%, leading the growth trend. In Daejeon, production of medical precision optics (140.9%) and chemical products (38.5%) soared.

On the other hand, excluding these regions, 12 metropolitan cities and provinces including Seoul (-8.5%), Gwangju (-8.0%), and Chungbuk (-6.7%) continued to experience declines. In Seoul, decreases were seen in clothing and fur (-10.3%), electrical equipment (-35.0%), and metal processed products (-35.3%). In Gwangju, production of electronic components, computers, video, and audio plummeted by 40.0%, and automobile production also declined by 7.5%. In Ulsan, where shipbuilding and automobile production facilities are concentrated, the industrial production growth that had continued for five quarters since the third quarter of 2018 stopped and turned to a 3.6% decrease. Although service industries and retail sales turned to growth, the impact of an expanded decline in construction orders (-65.9%) was significant.

On an annual basis, the sluggish trend continued. Industrial production last year decreased by 0.7% nationwide compared to the previous year, due to poor performance in 11 metropolitan cities and provinces including Seoul (-6.7%), Jeonbuk (-6.3%), and Chungnam (-5.6%).

Service industry production increased by 2.1% nationwide in the fourth quarter of last year, with all 16 metropolitan cities and provinces (Sejong 0%) including Seoul (3.3%) and Jeju (3.2%) showing growth. This was largely due to increased production in healthcare and social welfare, and information and communication industries. On an annual basis, it rose by 1.5% compared to the previous year.

Exports continued to show a sluggish trend in most regions. The nationwide export growth rate in the fourth quarter sharply declined by 11.7% compared to the previous year, with decreases continuing throughout last year due to poor performance in semiconductors, ships, and liquid crystal devices. On an annual basis, exports decreased by 10.3% nationwide, with all regions except Sejong (4.5%) showing declines.

The retail sales growth rate in the fourth quarter increased by 3.4% nationwide, rising in 14 metropolitan cities and provinces including Jeju (15.2%) and Seoul (6.9%), marking the largest increase since the third quarter of 2018 (3.8%). On an annual basis, retail sales increased by 2.4%.

The employment rate in the fourth quarter rose by 0.5 percentage points from the previous year to 61.4%, driven by increases in employment rates among those aged 60 and over and those in their 30s. Employment rates fell in Daegu (-0.8%p), Incheon (-0.6%p), and Chungbuk (-0.4%p), while rising in Daejeon (2.1%p), Gangwon (1.2%p), and Busan (1.1%p). On an annual basis, the employment rate improved by 0.2 percentage points compared to the previous year, reaching 60.9% nationwide.

Looking at nationwide population movement over the past year, five regions including Gyeonggi (134,666 people), Sejong (23,724 people), and Jeju (2,936 people) saw net population inflows, while 12 regions including Seoul (-49,588 people), Daegu (-23,673 people), and Busan (-23,354 people) experienced net outflows.

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