Korea’s April factory output rebounds amid weak consumption

Auto production rose at the fastest pace since January 2023; semiconductor output fell for a second straight month

Hyundai Motor vehicles are loaded onto a car carrier ship for export at the port of Ulsan, South Korea (File photo by Eun-Koo Kang)
Hyundai Motor vehicles are loaded onto a car carrier ship for export at the port of Ulsan, South Korea (File photo by Eun-Koo Kang)
Kwang-Sik Lee 2
2024-05-31 11:37:01 bumeran@hankyung.com
Economy

South Korea’s factory production rebounded in April on healthy manufacturing while domestic consumption and capital expenditures dipped, indicating an uneven recovery in Asia’s fourth-largest economy.

Factory output rose 2.2% in April from the previous month on a seasonally adjusted basis after declining by a revised 3% in March, the largest drop in 15 months, Statistics Korea data showed on Friday.

Retail sales, a gauge of private consumption, shrank 1.2% as durable goods including automobiles saw a 5.8% drop in sales, while service activity grew 0.3%. Facility investment dipped 0.2%.

“We saw that the rebound in manufacturing and services didn’t fully offset the previous month’s decline, while the decline in retail sales was larger than the previous month’s gain, so growth momentum is clearly slowing,” ING said in a note.

Korea’s economic growth is expected to decelerate to a seasonally adjusted 0.1% in the second quarter from the previous three months, when the economy expanded 1.3%, the bank said.
A customer browses beverages at a hypermarket in Seoul (File photo, courtesy of Yonhap)
A customer browses beverages at a hypermarket in Seoul (File photo, courtesy of Yonhap)

HEALTHY AUTO PRODUCTION

Auto production jumped 8.1% in April from the previous month, its highest growth since January 2023, led by increasing sport utility vehicle and hybrid car manufacturing. Korea is home to the world’s third-largest automaker Hyundai Motor Group, which includes Hyundai Motor Co. and Kia Corp.

Korea revised up the country’s car and auto parts export targets to $100 billion this year on May 27.

Chemicals output grew 6.4% as cosmetics production rose to meet strong demand amid a recovery in foreign tourists.

On the other hand, semiconductor output shrank 4.4%, extending its losing streak to a second straight month.

“The semiconductor sector may have been affected by the base effect,” said Gong Mi-sook, Statistics Korea’s deputy director general for short-term economic statistics. The sector’s production rose 4.9% in February.

“It remains to be seen whether it is a correction, as output jumped more than 20% in April from a year earlier and the industry itself remains healthy," said Gong. Chip production soared 22.3% last month on-year.

The world’s two largest memory chipmakers — Samsung Electronics Co. and SK Hynix Inc. — are headquartered in Korea.

Write to Kwang-Sik Lee at bumeran@hankyung.com
 
Jongwoo Cheon edited this article.
#Korea #factory #manufacturing #output #production #cars #automobiles #semiconductors #chemicals #cosmetics #exports #consumption #interestrates #inflation #BOK #Fed #Hyundai #Kia #Samsung #SKHynix

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