Production down 1.4%, decline after 5 months... Inventory rate at 'all-time high' (Update)

Last month, domestic production decreased by 1.4% compared to the previous month, marking a decline for the first time in five months. The manufacturing inventory ratio reached 130.4%, setting a record high since related statistics began in 1985.

According to the April Industrial Activity Trends released by Statistics Korea on the 31st, overall industrial production fell by 1.4% month-on-month as production increased in construction but decreased in public administration, mining and manufacturing, and services.

Mining and manufacturing production rose in telecommunications and broadcasting equipment (13.4%), but declined in machinery equipment (-6.9%) and pharmaceuticals (-8.0%), resulting in a 1.2% decrease compared to the previous month. However, compared to the same month last year, production increased in automobiles (16.6%) but decreased in semiconductors (-20.2%) and chemical products (-20.5%), leading to an 8.9% decline.

The manufacturing inventory ratio recorded the highest level since the start of related statistics at 130.4%. Kim Bo-kyung, Director of Economic Trend Statistics at Statistics Korea, explained, "Although mining and manufacturing production decreased by 1.2%, shipments fell by 4.6%, which caused a significant increase in inventory. The large drop in semiconductor shipments raised the inventory-to-shipment ratio itself."

Service industry production increased in finance and insurance (2.0%), but decreased in wholesale and retail trade (-3.1%) and transportation and warehousing (-1.3%), resulting in a 0.3% decline month-on-month. In particular, clothing showed a decline for two consecutive months due to a base effect from increased apparel sales in February.

Regarding facility investment, investment decreased by 0.6% in machinery such as video, audio, and communication equipment, while investment increased by 5.9% in transportation equipment such as aircraft, resulting in a 0.9% increase month-on-month. Construction performance rose by 1.2% month-on-month due to increased construction in buildings (2.4%). However, civil engineering construction performance declined by 2.4%.

The coincident composite index, which reflects the current economic situation, rose by 0.2 points compared to the previous month. Conversely, the leading composite index, which forecasts future economic conditions, fell by 0.2 points month-on-month, marking a decline for six consecutive months.

[Image source=Yonhap News]

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