March Production and Consumption Down, Investment Up... Coincident Index Drops Most Since Global Financial Crisis (Update)

[Asia Economy Reporter Kwangho Lee] The real economy is experiencing a growing shockwave due to the novel coronavirus infection (COVID-19). Production and consumption indicators for March have declined for two consecutive months. In particular, due to the impact of stringent social distancing measures, outings and consumption have decreased, causing service industry production to fall at the largest rate ever recorded.

According to the "March 2020 Industrial Activity Trends" released by Statistics Korea on the 29th, total industrial production decreased by 0.3% compared to the previous month. Following -0.1% in January and -3.4% in February, this marks three consecutive months of decline.

Service industry production fell by 4.4% compared to the previous month. Production in the arts, sports, and leisure sectors decreased by 31.2%, and accommodation and food services (-17.7%) and transportation (-9.0%) also remained in a downward trend. On the other hand, finance and insurance increased by 2.6%.

During the same period, retail sales decreased by 1.0%. Semi-durable goods such as clothing, shoes, and bags declined by 11.9%, and non-durable goods such as cosmetics and food products decreased by 4.4%.

Excluding the effect of a 14.7% increase in durable goods consumption such as passenger cars, which experienced parts supply issues in February, the consumption decline reaches 6.1%.

As the domestic demand sector's recession accelerates, the coincident composite index, which reflects the overall economic trend, fell at the largest rate since the global financial crisis. The leading composite index also dropped significantly. The coincident composite index fell by 1.2 points, and the leading composite index decreased by 0.6 points.

From April onward, manufacturing production is expected to be impacted due to the global economic lockdown effects.

A Statistics Korea official stated, "The impact on manufacturing production will be significantly reflected due to the spread of COVID-19 in major export countries such as the United States and Europe."

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