Service Industry Production in Q3 Declines One After Another Outside Seoul

[Sejong=Asia Economy Reporter Kim Hyunjung] Due to the impact of the novel coronavirus infection (COVID-19), service industry production in 15 metropolitan cities and provinces excluding Seoul declined in the third quarter of this year. In particular, the Incheon and Jeju regions, which are affected by air travel demand, suffered the most significant damage.

According to Statistics Korea's '2020 3rd Quarter Metropolitan City and Province Service Industry Production and Retail Sales Trends' released on the 10th, service industry production decreased in all 15 metropolitan cities and provinces except Seoul in the third quarter. The largest declines were seen in Incheon (-11.6%) and Jeju (-8.7%). Only Seoul (2.2%) showed growth.

In the second quarter, Seoul's service industry production decreased by 0.5%, but it turned to a 2.2% increase in the third quarter, largely due to significant growth in the finance and insurance sector (27.6%) and real estate sector (16.2%). In Incheon, production in transportation and warehousing (-39.3%) and accommodation and food services (-20.5%) was sluggish, while Jeju experienced declines across the board with wholesale and retail trade (-14.8%), transportation and warehousing (-21.5%), and arts, sports, and leisure (-42.3%).

Retail sales in the third quarter increased in eight metropolitan cities and provinces including Jeonnam (3.4%) and Chungnam (1.7%), but decreased in eight others including Jeju (-30.4%), Incheon (-9.4%), and Seoul (-7.8%). This was due to a sharp drop in duty-free store sales caused by a decrease in tourists amid the COVID-19 crisis. Duty-free store sales in Jeju and Incheon fell by 79.4% and 89.5%, respectively.

In Seoul, production in the finance and insurance sector increased by 27.6%, and in the real estate sector by 16.2%, driving the overall growth in service industry production. However, production in other service sectors excluding these industries declined even in Seoul. A Statistics Korea official stated, "The increase in individual stock investors led to a significant rise in stock and financial transactions," adding, "There was also some influence from the overheating of the real estate market."

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