Consumers Stuck Due to COVID... Going Out Less and Buying Fewer Clothes

Statistics Korea Announces November Industrial Activity Trends
Consumption Decreases 0.9% from Previous Month, Declining for Second Consecutive Month
Production and Investment Rebound Successfully... Economic-Related Indices Rise Together for 6 Months

On the 16th, when the number of new COVID-19 cases reached 1,078, the highest since the first confirmed case in the country on January 20th, a large shopping mall in Seoul showed a quiet scene. Photo by Hyunmin Kim kimhyun81@

[Sejong=Asia Economy Reporters Kim Hyun-jung and Jang Se-hee] Due to the impact of the third wave of the novel coronavirus infection (COVID-19), consumption decreased for two consecutive months last month. Industrial production rebounded thanks to a recovery in semiconductor exports and a booming stock market.

According to the 'November Industrial Activity Trends' released by Statistics Korea on the 30th, consumption last month fell by 0.9% compared to the previous month, continuing the decline for two consecutive months following a 1.0% drop in the previous month. Compared to the same month last year, it decreased by 1.5%, showing a larger decline than the 0.1% drop in October.

The consumption slump was due to reduced sales of semi-durable goods such as clothing (-6.9%) and durable goods such as passenger cars (-0.4%) caused by decreased outings. Ahn Hyung-joon, Director of Economic Trend Statistics at Statistics Korea, explained, "Due to social distancing measures amid the resurgence of COVID-19, people refrained from going out, resulting in lower sales of clothing and similar items," adding, "In the case of passenger cars, there was a base effect as many cars were sold in October due to the new car effect."

Total industrial production (seasonally adjusted, excluding agriculture, forestry, and fisheries) increased by 0.7% compared to the previous month, showing a solid performance. Production, which had shown unstable trends with fluctuations of -0.8% in August, 2.3% in September, -0.1% in October, and 0.7% in November, succeeded in rebounding thanks to revived semiconductor demand and active stock trading due to the booming stock market. Mining and manufacturing production, including manufacturing (0.3%), increased by 0.3%, escaping the decline of -1.1% in October, and semiconductor production, which had decreased by 9.5% the previous month, rose by 7.2% due to the base effect. Electronic components also increased by 7.4%.

Automobile production sharply declined by 8.8%, seemingly due to reduced demand caused by the overseas spread of COVID-19. Chemical products (-8.4%) and medical precision optics (-5.5%) also declined. Service industry production (0.7%) showed an increase for three consecutive months, led by finance and insurance (4.6%) and real estate (3.3%) driven by rising stock and real estate prices. The increase in finance and insurance was the largest in over eight years since February 2012 (5.0%). On the other hand, due to the impact of the social distancing level upgrade, sectors with high face-to-face contact such as accommodation and restaurants (-2.7%), health and social welfare (-0.8%), and wholesale and retail (-0.3%) showed sluggish trends.

Facility investment increased by 3.6%, with a decrease in transportation equipment such as ships (-3.7%) but an increase in machinery such as special industrial machinery (6.3%).

The coincident index of economic activity, which shows the current economy, and the leading index, which predicts future economic conditions, both rose by 0.5 points and 0.7 points respectively from the previous month, marking six consecutive months of simultaneous increase. This is the longest period of simultaneous increase in 21 years and 3 months since the 12-month rise from September 1998 to August 1999.

In December, the year-end, related indicators are expected to be influenced not only by seasonal factors but also by the trend of COVID-19. Director Ahn said, "Exports have improved compared to the same period last year as of the 20th of December," adding, "Overseas vaccine supply and the government's fourth supplementary budget are positive factors."

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