Service Industry in Q2 Hits Lowest Since 2000 Statistics...Seoul Also Turns to Decline

Statistics Korea Announces 'Regional Economic Trends for Q2 2020'

[Asia Economy Reporter Jang Sehee] In the second quarter of this year, service industry production decreased across all regions. The decline was largely due to reduced production in transportation and warehousing, lodging, and dining sectors.

According to the '2020 Q2 Regional Economic Trends' released by Statistics Korea on the 19th, nationwide service industry production fell by 3.4% compared to the same period last year, driven by decreases in transportation and warehousing, lodging, and food services. This is the lowest level since statistics began in 2000.

In particular, Jeju (-12.9%), Incheon (-11.6%), and Busan (-5.6%) experienced sharper declines than the national average due to reduced production in lodging, food services, transportation, and warehousing.

A Statistics Korea official explained, "The significant decline in transportation, warehousing, lodging, and dining sectors was due to the impact of the novel coronavirus (COVID-19). The reason Seoul's decrease was smaller is that the deterioration in the finance and insurance sectors was less severe compared to other regions."

Seoul, which had shown growth of 2.3% in the previous quarter due to increased production in finance, insurance, and real estate, also shifted to a decline. Service industry production in Seoul fell by 0.6% compared to the same period last year.

Exports dropped by 20.3% year-on-year due to sluggishness in passenger cars, other petroleum products, and vehicle parts. All regions saw declines, with Ulsan (-39.9%), Daegu (-36.2%), and Jeonnam (-31.2%) notably decreasing due to poor performance in petroleum products and passenger cars.

Retail sales increased by 1.9% year-on-year, driven by higher sales in passenger cars, fuel retail stores, non-store retailing, supermarkets, and general merchandise stores. Jeju (28.1%), Seoul (-8.3%), and Incheon (-5.2%) saw declines due to reduced sales in duty-free shops and specialty stores, whereas Jeonnam (10.2%), Chungnam (8.7%), and Gwangju (8.0%) experienced growth from increased sales in passenger cars, fuel retail stores, supermarkets, general merchandise, and convenience stores.

Manufacturing production fell by 5.1% year-on-year due to decreased output in automobiles and electronic components (excluding semiconductors). Daegu (-25.1%), Seoul (-20.0%), and Daejeon (-15.8%) saw declines from reduced production in automobiles, clothing, and electronic components, while Gyeonggi (3.2%) increased, centered on semiconductors and other machinery equipment.

Construction orders rose by 16.8% year-on-year as orders for housing, factories and warehouses, power generation, and telecommunications increased nationwide. Ulsan (162.4%), Gyeongbuk (143.5%), and Seoul (80.7%) saw significant growth due to increased orders for housing and machinery installation.

The national employment rate was 60.0%, down 1.3 percentage points year-on-year due to declines in employment rates among people in their 20s and 50s. Employment rates fell in Daegu (-2.7 percentage points), Jeju (-2.6 percentage points), and Gyeonggi (-1.9 percentage points), while rising in Daejeon (1.0 percentage point), Jeonnam (0.7 percentage point), and Chungbuk (0.4 percentage point).

Meanwhile, consumer prices nationwide fell by 0.1% year-on-year due to decreases in petroleum products, durable goods, and public services. Incheon (0.3%) and Seoul (0.2%) saw increases driven by rising prices in livestock products, seafood, and personal services.

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