Facility Investment Up 12.7% in September... Largest Increase in Seven Months (Comprehensive)

Surge in Investments in Semiconductor Equipment and Ships
Total Industrial Production Up 1.0%, Construction Completed Up 11.4%
Retail Sales Down 0.1% Due to Weakness in Clothing and Passenger Cars

Facility investment saw its largest increase in seven months, driven by a surge in investments in semiconductor manufacturing equipment, ships, and aircraft. Both the service and construction industries rose together, leading to a recovery in total industrial production. However, despite the distribution of consumer coupons aimed at revitalizing livelihoods, retail sales in September declined for the second consecutive month.

According to the "September Industrial Activity Trends" released by the National Data Office on October 31, facility investment increased by 12.7% compared to the previous month, marking the largest increase in seven months since February (21.3%). Investment in machinery rose by 9.9%, and investment in transportation equipment rose by 19.5%. In particular, investment in semiconductor manufacturing equipment among machinery surged by 28.0%. Among transportation equipment, other transportation equipment such as ships and aircraft increased by 111.8%. Lee Dowoon, Director of Economic Trend Statistics at the National Data Office, analyzed, "This is the result of the recovery in the semiconductor market coinciding with increased global transportation demand," adding, "Investments in semiconductor manufacturing equipment and transportation equipment, such as imports of ships and aircraft, increased simultaneously."

Construction completed also increased by 11.4% from the previous month, marking the largest rise in 20 months since January last year (21.8%). Building construction rose by 14.8%, and civil engineering by 2.9%. By use, non-residential building construction increased by 26.6%, and residential by 8.1%. The main factor cited for the expansion in building construction was the increase in performance at semiconductor-related construction sites. Director Lee stated, "Progress in major semiconductor plant construction by companies such as Samsung and SK had a significant impact."

Total industrial production increased by 1.0% from the previous month. Mining and manufacturing (-1.2%) slowed due to declines in automobile and machinery production, but the service industry (1.8%) and construction industry (11.4%) increased. By major item, automobiles (-18.3%) and machinery (-6.9%) decreased. Automobile production saw its largest drop in five years and four months since May 2020 (-23.1%), attributed to a decline in the production of finished vehicles such as small and large passenger cars. Machinery production also saw its largest decline in eight months since January (-8.6%). However, production of semiconductors (19.6%) and pharmaceuticals (11.0%) increased. Director Lee commented, "Compared to the same month last year, both automobile and semiconductor production trends remain sound, and this is a short-term adjustment due to base effects."

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During the same period, service industry production increased by 1.8%, the largest rise in two years and seven months since February 2023 (1.8%). By sector, wholesale and retail (5.8%) and finance and insurance (2.3%) led the growth. Within wholesale and retail, wholesale rose by 8.2% and retail by 2.5%. The increase in wholesale was influenced by the launch of new telecommunications devices and a rise in wholesale of daily necessities. Retail sales reflected the effects of Chuseok holiday events, energy-efficient home appliance rebates, and the distribution of consumer coupons.

Retail sales in September decreased by 0.1% from the previous month, marking a decline for the second straight month following August (-2.4%). Sales of semi-durable goods such as clothing and shoes (-5.7%) and passenger cars (-3.5%) fell, while sluggish consumption of food, beverages, and fuel also had an impact. Durable goods such as telecommunications devices and computers increased by 3.9%. By retail type, large discount stores (-10.4%) and supermarkets (-9.9%) declined, but non-store retail (11.6%) and passenger car and fuel retailers (11.6%) increased. This is analyzed as the result of increased production in wholesale and retail and finance and insurance industries, driven by the distribution of consumer coupons, the launch of new telecommunications devices, and increased stock trading volume.

The coincident composite index, which reflects the current economic situation, rose by 0.2 points from the previous month to 99.4. The leading composite index, which forecasts future economic trends, also increased by 0.1 points to 102.1, marking a rise for the fourth consecutive month. The Ministry of Economy and Finance stated, "The largest increase in construction completed in 20 months, which had been limiting production growth, is positive for the future economy," adding, "We will strengthen policy efforts to ensure that the momentum for economic recovery can spread."

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