How Much Have 'Industry and Employment' Contracted Due to COVID-19?

Total Industrial Production Down 0.9% MoM... Production Declines in Manufacturing, Services, and Construction Sectors
August Employment at 27.085 Million... Down 274,000 YoY

(Photo) [Image source=Yonhap News]

[Asia Economy Reporter Joo Sang-don] Due to the impact of the novel coronavirus disease (COVID-19), total industrial production in August returned to a decline after three months. The shock was fully reflected in the labor market as well. During the past six months of declining employment, public work jobs for those aged 60 and over showed a 'solo increase,' while the perceived unemployment rate among the youth soared to the highest level since statistics began.

According to the 'August Industrial Activity Trends' released by Statistics Korea, total industrial production (seasonally adjusted, excluding agriculture, forestry, and fisheries) decreased by 0.9% compared to the previous month. This marks the first decline in total industrial production in three months since May this year (-1.2%). Ahn Hyung-jun, Director of Economic Trend Statistics at Statistics Korea, explained, "Due to the resurgence of COVID-19, industrial trends turned to a decline after three months. Service sector production decreased for the first time in five months, and manufacturing also fell by 1.0% due to a drop in exports."

In particular, manufacturing production decreased by 1.0% month-on-month, driven by declines in food products (-7.3%) and automobiles (-4.1%). Manufacturing shipments increased in semiconductors (4.3%) and telecommunications and broadcasting equipment (18.7%), but decreased in automobiles (-3.9%) and food products (-5.0%), resulting in a 1.4% decline compared to the previous month. Domestic demand saw a larger decrease, with domestic shipments down 1.8% and exports down 0.9% month-on-month. Meanwhile, manufacturing inventories increased by 2.1% compared to the previous month. The inventory ratio rose by 4.1 percentage points from the previous month. The average operating rate in manufacturing was 69.6%, down 0.5 percentage points from the previous month.

According to the 'August Employment Trends,' the number of employed persons last month decreased for the sixth consecutive month, marking the longest streak in 11 years since the financial crisis in 2009 (January to August, 8 months). Such a sustained decline has historically occurred only during national disasters such as the 1998 foreign exchange crisis, the 2003 credit card crisis, and the 2008 financial crisis.

In particular, the August employment figures showed a six-month consecutive decline since March not only in sectors related to face-to-face consumer contact such as wholesale and retail trade, accommodation and food services, and education services, but also in manufacturing (-50,000). The young and middle-aged are being excluded from the labor market. Employment increased by 384,000 among those aged 60 and over in August, but decreased across all other age groups: 30s (-230,000), 40s (-182,000), 20s (-139,000), and 50s (-74,000). This 'solo' increase in employment among the elderly has continued for six months since March this year.

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