Last Year Total Industrial Production -0.8%... First 'Negative' Since Statistics Compilation

[Asia Economy Reporter Moon Chaeseok] Due to the impact of COVID-19, the total industry production index recorded a negative value for the first time since statistics began last year. The government's social distancing measures for quarantine severely affected the production of service industries such as accommodation and food services, causing a decline.

On the 29th, Statistics Korea announced the 'December 2020 and Annual Industrial Activity Trends' report containing this information. The total industry production index was 107.2 (2015=100), a 0.8% decrease compared to the previous year. This is the first time since related statistics began to be compiled and published in 2000 that a year-on-year decline has been observed.

The production slump was largely due to a 2.0% decrease in service industry production, including accommodation, food services, transportation, and warehousing, despite a 0.4% increase in manufacturing and other mining and manufacturing production. The average operating rate of manufacturing was 71.3%, the lowest since 67.6% during the International Monetary Fund (IMF) foreign exchange crisis in 1998.

Retail sales, which indicate consumption trends, decreased by 0.2%, marking the largest decline since the card crisis in 2003 (-3.1%). This retail sales figure reflects the government's emergency disaster relief payments, but Statistics Korea stated that it is not possible to determine exactly how much influence this had.

Facility investment rose 6% year-on-year due to increased investment in machinery such as special industrial machinery (8.6%) driven by the semiconductor sector. Construction performance declined by 2.3% year-on-year due to poor results in building construction (-5.2%).

Kim Bokyung, head of the Industrial Trends Division at Statistics Korea, explained, "In 2020, the impact was significant due to the sharp decline in face-to-face service industries, especially transportation and warehousing, accommodation and service industries, and wholesale and retail trade, caused by COVID-19."

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