Industrial Production Surges Unexpectedly... 4.2% Increase in June

Statistics Korea, June Industrial Activity Trends

Production, Consumption, and Investment Triple Increase in 5 Months

[Sejong=Asia Economy Reporter Joo Sang-don] For the first time since the outbreak of the novel coronavirus infection (COVID-19), the three major indicators of industrial activity in Korea?industrial production, consumption, and investment?all rose simultaneously last month. The government expressed optimism about economic recovery but emphasized the need to remain cautious.

According to the "June Industrial Activity Trends" released by Statistics Korea on the 31st, total industrial production (seasonally adjusted, excluding agriculture, forestry, and fisheries) increased by 4.2% compared to the previous month. Retail sales rose by 2.4%, and facility investment grew by 5.4%. This simultaneous rise in the three indicators occurred for the first time since December 2019.

Kim Yong-beom, the 1st Vice Minister of the Ministry of Economy and Finance, presided over the "Innovation Growth Strategy Review Meeting and Policy Review Meeting" on the same day, stating, "In the June trends, all component indicators on the production and expenditure sides increased, making the improvement signs glimpsed in preliminary indicators and sentiment indicators more distinct, thereby further raising the possibility of an economic rebound in the third quarter." He also evaluated, "Retail sales rose by 6.3% compared to the same month last year, showing that our economy has substantially recovered to pre-COVID-19 levels in terms of consumption."

Mining and manufacturing production rose by 7.2% compared to the previous month, marking the largest increase in 11 years and 4 months since February 2009 (7.3%) during the global financial crisis. In particular, manufacturing production increased by 7.4% month-on-month, driven by growth in automobiles (22.9%) and semiconductors (3.8%). Accordingly, the average operating rate of manufacturing rose by 4.9 percentage points from the previous month to 68.3%. Manufacturing shipments showed favorable trends in both domestic demand (7.3%) and exports (9.8%). The export shipment growth rate reached its highest level in 32 years and 9 months since September 1987 (19.2%). Inventories decreased by 1.4% compared to the previous month as shipments increased more than production.

Service industry production also increased by 2.2%, maintaining the upward trend that began in April (0.4%) for the third consecutive month. Retail sales rose by 2.4% compared to the previous month, continuing the growth trend observed since April (5.3%) for three consecutive months. Facility investment increased by 5.4%, while construction performance and orders rose by 0.4% and 60.2%, respectively.

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