June Production Up 1.6%... Consumption Rises 1.4% After One Month (Update)

Statistics Korea "Economic Recovery... Uncertainty Grows Due to 4th Wave of COVID-19"

[Sejong=Asia Economy Reporter Moon Chaeseok] Last month, industrial production and consumption grew by over 1% compared to the previous month. Industrial production showed an increase for the second consecutive month. These figures do not reflect the performance of this month, when the fourth wave of the COVID-19 pandemic fully began.

According to the June Industrial Activity Trends released by Statistics Korea on the 30th, total industrial production increased by 1.6% compared to May. This was influenced by increased production in the service sector (1.6%) and manufacturing and mining industries (2.2%).

Retail sales rose by 1.4% month-on-month, driven by sales of clothing and pharmaceuticals. In May, retail sales had decreased by 1.8% compared to April, but turned to growth within a month.

In the investment sector, facility investment slightly decreased by 0.2% from the previous month due to a decline in machinery investment. Construction performance increased by 2.0% month-on-month, supported by growth in civil engineering works.

Regarding manufacturing and mining production, output declined in telecommunications and broadcasting equipment (-8.9%), but increased in semiconductors (8.6%) and automobiles (6.4%), resulting in a 2.2% rise compared to the previous month.

Service sector production decreased in water supply, sewage, and waste management (-1.3%), but increased in finance and insurance (3.2%) and wholesale and retail trade (1.6%), leading to a 1.6% growth from the previous month.

Retail sales growth was attributed to increased sales of semi-durable goods such as clothing (5.8%) and non-durable goods such as pharmaceuticals (1.0%).

The coincident index of economic indicators, which reflects the current economic situation, rose by 0.1 points to 101.4 compared to the previous month.

The leading index of economic indicators, which predicts future economic conditions, increased by 0.3 points to 104.4. This marks the 13th consecutive month of growth in the leading index. It is the longest period of continuous increase in 21 years and 10 months since the 14-month rise from July 1998 to August 1999.

However, the June Industrial Activity Trends do not reflect the impact of the fourth wave of COVID-19, which began in earnest in early this month.

Oh Woonseon, Director of Economic Trend Statistics at Statistics Korea, said, "Most major indicators showed favorable results last month, indicating a strengthening economic recovery. However, with the recent intensification of social distancing due to the fourth wave of COVID-19, uncertainty has increased."

He added, "It is not easy to predict how the economic impact of the fourth wave will unfold, but given the time and experience all economic agents have spent adapting since the first wave early last year, we expect the negative effects will not be as severe as before."

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