Seoul:South Korea's industrial output surged in September, marking the fastest growth in over 15 years, primarily driven by the semiconductor industry. Retail sales and facility investment also showed significant increases.
According to Yonhap News Agency, industrial production rose by 3 percent in September compared to the previous month, as reported by the Ministry of Data and Statistics. This represents the strongest monthly increase since a 3.4 percent rise in March 2011.
The simultaneous growth of the three major indicators—industrial output, retail sales, and facility investment—had not been observed since June. In June, industrial output had grown by 2.6 percent, before slowing to 0.1 percent in July and declining by 1.2 percent in August. The mining and manufacturing sector, a crucial component of the economy, experienced a 9 percent increase, the highest in 17 years and seven months. Semiconductor production led this surge with a 19.2 percent increase, the largest since a 28.2 percent rise in February.
The Ministry of Data and Statistics attributed these gains to heightened production of memory chips, including dynamic random access memory (DRAM) products. The automobile industry also saw significant growth, with output increasing by 39.9 percent, driven by higher production of auto parts and hybrid models following the resolution of local carmaker strikes and the end of the summer vacation season. Conversely, the production of medical, precision, and optical instruments decreased by 8.8 percent.
Service output in September grew by 0.5 percent, bolstered by the wholesale and retail segment and the transportation and storage industry, including maritime shipping. Retail sales, an indicator of private spending, increased by 3.6 percent, with durable goods experiencing the most substantial growth at 4.4 percent, led by rising demand for cars. Sales of nondurable goods, such as food, and semidurable goods, like clothes, rose by 4.2 percent and 0.6 percent, respectively.
Lee Doo-won, a senior statistics official, noted that the recovery in automobile sales contributed to the improvement in retail sales. He also highlighted an increase in sales of nondurable goods following the Chuseok holiday, supported by discount events at supermarkets.
Facility investment rose by 5.3 percent in September, with machinery investment up by 4.7 percent and transportation equipment investment increasing by 7.4 percent. The Ministry of Finance and Economy, in a separate release, stated that while fluctuations might occur in the October report, the upward trend in the country's industrial output is expected to continue, supported by robust consumption, business sentiment, and exports. However, the ministry cautioned about potential risks, including high oil prices, global interest rate hikes, and uncertainties related to the U.S. midterm elections, which could increase financial market volatility and living costs.
The ministry emphasized its focus on stabilizing living costs, prioritizing housing, jobs, financial services for vulnerable groups, and addressing disparities to ensure the public feels improvements.
Source Yonhap News Agency