Manufacturing Average Operating Rate at 63.6%... Lowest in 11 Years and 4 Months (Update)

May Industrial Activity Trends

[Sejong=Asia Economy Reporters Kim Hyunjung, Joo Sangdon] Last month, the average operating rate of the manufacturing industry fell to its lowest level in 11 years and 4 months. This was due to an increase in factories halting operations amid the impact of the novel coronavirus disease (COVID-19).

According to the May industrial activity trends announced by Statistics Korea on the 30th, the average operating rate of the manufacturing industry was 63.6%, down 4.6 percentage points from the previous month. This is the lowest level in 11 years and 4 months since January 2009 (62.8%).

Overall industrial production decreased by 1.2% compared to the previous month, despite increases in the service sector, due to declines in mining, manufacturing, and construction. This marks the fifth consecutive month of decline.

Production in the mining and manufacturing industries and electricity and gas sectors all decreased, resulting in a 6.7% drop in mining and manufacturing production compared to the previous month. In particular, manufacturing production decreased by 6.9% compared to the previous month, despite increases in semiconductors (10.8%) and other transportation equipment (3.1%), due to declines in automobiles (-21.4%) and machinery equipment (-12.9%).

Service industry production increased by 2.3% compared to the previous month, driven by growth in wholesale and retail, accommodation and food services, and associations, repair, and personal services.

Facility investment decreased by 5.9% compared to the previous month, as investments in transportation equipment such as ships (-16.1%) and machinery such as precision instruments (-1.7%) both declined. Domestic machinery orders also fell by 12.6%, with decreases in both private sectors such as construction (-12.9%) and public sectors such as electric power (-6.8%).

The retail sales index increased by 4.6% compared to the previous month, with sales rising across durable goods such as passenger cars (7.6%), semi-durable goods such as clothing (10.9%), and non-durable goods such as vehicle fuel (0.7%).

The coincident index, which reflects the current economic situation, fell by 0.8 points from the previous month to 96.5, while the leading index, which forecasts future economic conditions, decreased by 0.3 points from the previous month to 98.9.

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