'All-time High' Domestic Supply in Manufacturing Up 4.5% Last Year... Semiconductor Boom and Non-face-to-face Effects

[Asia Economy Sejong=Reporter Kim Hyewon] The 'Manufacturing Domestic Supply Index,' which had been sluggish in recent years, rose by the largest margin ever last year.

The Manufacturing Domestic Supply Index quantifies the real supply value of manufacturing products produced domestically and shipped domestically or produced abroad and distributed domestically, serving as an indicator to gauge domestic market trends.

According to the '2021 Q4 and Annual Manufacturing Domestic Supply Trends' released by Statistics Korea on the 9th, last year's Manufacturing Domestic Supply Index was 108.7 (2015=100), up 4.5% from the previous year. This is the highest growth rate since the statistics began in 2010.

The Manufacturing Domestic Supply Index had increased by 4.2% in 2017 but then declined by -0.7% in 2018, 0.0% in 2019, and -1.2% in 2020, before rebounding last year after four years.

Supply of imported products increased by 14.7%, mainly in electronic products and machinery equipment, while supply of domestically produced products rose by 0.7%, centered on machinery equipment and chemical products. As a result, the import share rose by 2.2 percentage points from the previous year to 29.4%, marking the highest level ever on an annual basis.

A Statistics Korea official explained, "The increase in imports of machinery equipment such as wafer processing equipment was due to expanded facility investment by domestic semiconductor companies, and the expansion of the non-face-to-face economy led to increased imports of electronic products such as system semiconductors and computers." Statistics Korea also analyzed that the launch of the iPhone 13 influenced the increase in imports of portable phones.

When dividing manufacturing products into final goods and intermediate goods, supply of final goods increased by 2.9% compared to the previous year. This was because domestic final goods supply decreased by 2.3%, but imports increased by 16.0%. Supply of intermediate goods increased by 2.8% domestically and 13.8% in imports, rising overall by 5.6%.

By industry, supply increased in machinery equipment (12.3%) and electronic products (8.9%), but decreased in other transportation equipment (-32.8%).

The import share rose compared to the previous year in other transportation equipment (8.4 percentage points) and pharmaceuticals (5.9 percentage points), but decreased in medical precision science (-0.8 percentage points). The rise in the import share of pharmaceuticals from 34.4% in 2020 to 40.3% last year was influenced by large-scale imports of COVID-19 vaccines.

Looking at the trends for the fourth quarter of last year, the Manufacturing Domestic Supply Index was 112.9 (2015=100), up 3.9% from the same period the previous year. Domestic supply decreased by 0.5%, while imports increased by 15.3%. During the same period, the import share rose by 3.3 percentage points from a year earlier to 30.0%.

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