SEJONG, In a significant shift, South Korea’s exports experienced an upswing in October, marking the first on-year growth in 13 months. The increase was propelled by a robust performance in automobile shipments, complemented by promising signs of recovery in the semiconductor industry.
According to Yonhap News Agency, data released by the Ministry of Trade, Industry and Energy, outbound shipments in October rose 5.1 percent on-year, totaling US$55 billion. Additionally, the country achieved a trade surplus of $1.64 billion for the month, marking the fifth consecutive month of gains. However, it was noted that imports witnessed a decline of 9.7 percent on-year, falling to $53.4 billion.
Analyzing sector-specific performance, automobile exports were the standout, recording a 19.8 percent increase to reach $5.88 billion, and thereby contributing significantly to the overall positive trend. This marks 16 consecutive months of on-year growth in the sector. The increase in car exports was attributed to robust demand from North America and Europe, particularly for SUVs and eco-friendly models.
The petroleum products sector also showed strength with an 18 percent increase in exports, amounting to $5.26 billion. On the other hand, the petrochemical goods sector experienced a slight setback with a 3.2 percent decrease, bringing exports down to $3.61 billion. Ship exports more than doubled on-year in October, totaling $2.83 billion.
In the crucial semiconductor sector, which is a major pillar of the South Korean economy, exports decreased by 3.1 percent to $8.94 billion. Despite the decline, there is a sense of optimism as this represents the most modest drop since August 2022, indicating potential signs of recovery in the future. The Ministry highlighted that while global chip sales have been sluggish, there has been improvement due to the release of new smartphones and rising demand for artificial intelligence servers.
Breaking down exports by destination, shipments to the United States increased by 17.3 percent to $10.1 billion, setting a new record for the month of October. This growth was driven by strong demand for cars, machinery products, and mobile devices. Conversely, exports to China, South Korea’s largest trading partner, decreased by 9.5 percent to $11 billion, affected by weaker performance in steel products and display panels. Exports to the European Union also decreased by 10.7 percent to $5 billion.
Industry Minister Bang Moon-kyu commented on the positive trend, stating that exports have managed to grow and maintain a trade surplus despite numerous global challenges including high borrowing costs, geopolitical tensions, and high oil prices. He assured that the government will continue to support the upward momentum of exports and take measures to mitigate potential risks, such as China’s export control of graphite, to safeguard South Korea’s outbound shipments.
It is important to note that prior to this turnaround, South Korea’s exports had been in a state of decline since October 2022, influenced by aggressive monetary tightening globally and a slowdown in the world economy.