SEOUL: South Korea's industrial output rose for a second consecutive month in September, largely due to gains in the semiconductor sector.
According to Yonhap News Agency, The data showed that industrial output advanced 1.1 percent on-month in September, following a 2 percent on-month gain in August. When compared to the same period last year, industrial output rose 2.8 percent. Retail sales and facility investment also recorded growth last month, signaling a gradual economic recovery.
September marked the first time since May that South Korea reported an increase in all three major industrial activity indicators. Growth in industrial output was chiefly driven by a 12.9 percent on-month gain in the semiconductor sector. This followed a 13.5 percent jump in August, making it the first time in more than 14 years that the country logged double-digit growth in chip output for two consecutive months.
On an annual basis, semiconductor sector output surged 23.7 percent in September, the highest on-year rise since June 2022. This sector also saw a record-breaking 69.4 percent on-month surge in exports for September, the largest increase since Statistics Korea began tracking this data in 2000.
South Korea's inventory for chips dropped by 6.7 percent last month, impacted by rising global demand. This solid performance in the semiconductor sector contributed to an overall 1.9 percent on-month increase in the manufacturing sector output.
Among other sectors, machinery and equipment output rose by 5.1 percent, whereas medicine and auto industries reported a decline, registering a 13.1 percent and 7.5 percent drop, respectively. The service sector showed a modest 0.4 percent increase, led by growth in the accommodation and dining sector which offset declines in arts, sports, and leisure.
According to an agency official, the manufacturing sector's performance is showing signs of recovery starting from the third quarter, although he acknowledged that some of the growth might be attributed to low base effects from previous months.
Retail sales inched up by 0.2 percent on-month, marking an end to a two-month decline. However, compared to the same period last year, sales decreased by 1.9 percent due to weak demand for both durable and semi-durable goods.
Facility investment rose 8.7 percent on-month in September but was down 5.7 percent compared to the same month last year. The finance ministry noted that while the September data indicates a recovery led by exports, uncertainties remain due to global factors such as the Israel-Hamas conflict. The government plans to enhance market monitoring and implement necessary measures in response.
Government data for the first 20 days of October showed a 4.6 percent on-year rise in exports, driven by strong shipments of cars and petroleum products. This came after a year-long decline in exports, although September recorded the smallest decline so far this year.