March Industrial Production Increased by 1.5% but Consumption and Investment Both Declined (Supplement)

[Asia Economy Sejong=Reporter Kim Hyewon] Industrial production in March returned to an upward trend after three months, but both consumption and investment declined.

According to the 'March Industrial Activity Trends' released by Statistics Korea on the 29th, the March total industrial production index (seasonally adjusted, excluding agriculture, forestry, and fisheries) was 117.1 (2015=100), up 1.5% from the previous month. Total industrial production had decreased for two consecutive months this year in January (-0.3%) and February (-0.3%).

In March, service industry production increased by 1.5%. Manufacturing and other mining and manufacturing production rose by 1.3%. Construction decreased by 0.3%, while public administration increased by 3.4%.

The retail sales index (seasonally adjusted), which indicates consumption trends, was 120.1 (2015=100) in March, down 0.5% from the previous month. Durable goods such as home appliances plunged by 7%. Semi-durable goods also decreased by 2.6%, while non-durable goods (such as food and beverages) increased by 4.1%.

Facility investment fell by 2.9% as investments in machinery and transportation equipment both declined.

The coincident index of economic indicators, which reflects the current economy, was 102.4, down 0.2 points from the previous month, marking a decline for the first time in six months. The leading index of economic indicators, which predicts future economic conditions, was 99.5, down 0.3 points, continuing a downward trend for nine consecutive months.

Eo Unseon, Director of Economic Trend Statistics at Statistics Korea, said, "Although service industry production and mining and manufacturing production showed favorable performance, leading to an overall increase in total production, domestic demand indicators all declined simultaneously, showing a sluggish pattern and indicating an unstable recovery."

Immediately after the Statistics Korea announcement, Hong Namgi, Deputy Prime Minister and Minister of Economy and Finance, posted on social media, stating, "Although production-side indicators showed generally favorable performance, including a significant increase in total industrial production, expenditure-side indicators such as investment and retail sales were weak, causing the composite coincident index to decline slightly for the first time in six months."

He added, "March retail sales slightly decreased due to the peak of the Omicron spread in March and weakness in durable goods such as home appliances and automobiles, showing that the foundation for domestic demand recovery is not yet solid. The slight decline in the coincident index after six months can be seen as a sign of increased uncertainty in the economic recovery trend amid difficult external conditions, requiring special caution and vigilance."

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