'Butimmok' Manufacturing Domestic Demand Down 3 Consecutive Years... Intermediate Goods Supply -3.4%

by Moon Chaeseok

Published 13 Feb.2021 06:00(KST)

'Butimmok' Manufacturing Domestic Demand Down 3 Consecutive Years... Intermediate Goods Supply -3.4%

[Sejong=Asia Economy Reporter Moon Chaeseok] South Korea's manufacturing sector indicators recorded negative growth for three consecutive years. This is due to the prolonged COVID-19 pandemic, which has contracted domestic production activities and reduced the domestic supply of intermediate goods.

According to the "2020 Q4 and Annual Domestic Supply Trends of Manufacturing" released by Statistics Korea, last year's domestic supply index for manufacturing was 103.6 (2015 base 100), down 0.9% from the previous year.

After declining by 0.7% in 2018, marking the first drop since related statistics began in 2010, the index has shown a decreasing trend for three consecutive years.

This index represents the value of manufacturing products produced domestically or imported and supplied within the country. It is an indicator showing domestic market trends.

Notably, the domestic supply of intermediate goods, which are used as raw materials in heavy industries such as semiconductors and automobile parts, has decreased.

Intermediate goods declined by 3.4% compared to the previous year, with the rate of decrease expanding from -0.2% in 2018 and -0.7% in 2019.

On the other hand, the domestic supply of final goods increased by 2.8%, driven by a rise in capital goods supply, including semiconductor manufacturing equipment. The supply of consumer goods decreased by 0.3%.

Kim Bokyung, head of the Industrial Trends Division at Statistics Korea, explained, "The sluggish domestic manufacturing and production activities due to COVID-19 last year affected the decrease in intermediate goods."

By industry, primary metals recorded -8%, and metal processing -4.9%. In particular, the decline in primary metals was notably larger than -3.9% in 2018 and -1.6% in 2019.