Export Slump... Manufacturing Inventory Piling Up Despite Production Cuts

Exports Decline for 6 Consecutive Months... Trade Deficit for 13 Months
Semiconductor Exports Down 30%
Manufacturing Production Decreases for 5 Consecutive Months through February

Semiconductor exports continued to decline by more than 30% in March, leading to a decrease in manufacturing production, including semiconductors, and an accumulation of inventory.

According to the Ministry of Trade, Industry and Energy on the 2nd, export value (provisional customs clearance basis) was $55.12 billion, down 13.6% compared to the same period last year. Exports have decreased for six consecutive months from October last year to this month.

The annual trade balance recorded a deficit of $22.41 billion. This means that the trade deficit has continued for 13 consecutive months from March last year to last month. In particular, semiconductor exports last month fell 34.5% compared to the same period last year. Exports have decreased for eight consecutive months from August last year (-7.8%) to this month.

[Image source=Yonhap News]

Due to sluggish exports, manufacturers are reducing production. According to Statistics Korea, manufacturing production in February decreased by 3.1% compared to the previous month, marking five consecutive months of decline. Especially, semiconductor production in February dropped 17.1% compared to the previous month. This decline rate was the steepest since December 2008 (-18.1%).

With the decrease in manufacturing production, the average operating rate of manufacturing fell by 2.4 percentage points from the previous month to 68.4%.

Inventory is increasingly accumulating. Manufacturing inventory rose 0.9% compared to the previous month. Although it decreased in electrical equipment (-3.0%) and communication and broadcasting equipment (-9.1%), it increased in semiconductors (3.9%), electronic components (9.5%), and machinery equipment (5.7%).

Compared to the same month last year, inventory decreased in primary metals and electrical equipment, but increased in semiconductors and automobiles, resulting in an 8.9% increase in manufacturing inventory.

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