Industrial output grows 6.9% in April

Korea’s industrial output continued to grow in April, but its expansion pace slowed, raising concerns the nation’s economic recovery may be losing momentum, a government report showed Tuesday.

According to the report by Statistics Korea, production in the mining and manufacturing industries rose 6.9 percent last month from a year earlier, decelerating from a revised 9 percent growth in March.

On-year production expanded for the 22nd consecutive month since July 2009. However, the April output declined 1.5 percent from a month earlier, the report showed.

“Sluggish output of chemicals, automobiles, and visual and audio equipment led to the on-month 1.5 percent contraction,” the report said.

Such mixed output figures came as South Korea’s economy remained on its recovery track, boosted by strong exports.

The economy, Asia’s fourth largest, grew 1.4 percent during the first quarter from three months earlier, accelerating from a 0.5 percent gain in the fourth quarter of last year. Compared with a year earlier, the economy expanded 4.2 percent.

The government is pushing to achieve 5 percent economic growth this year while stabilizing inflation at around 3 percent. But growing inflationary pressure is still feared to weigh on the economy by dampening consumer spending.

The debt crisis in Europe, protracted unrest in Arab countries and the devastating earthquake that hit Japan are also cited as possible risk factors for the nation’s export-driven economy.

The report indicated that the outlook for economic conditions became cloudier amid lingering uncertainties at home and abroad.

The leading economic composite index, a gauge of economic performance eight to 15 months ahead of time, fell 0.5 percentage point from a month earlier, the report showed.

The index measuring current economic conditions dropped 0.7 percentage point from a month earlier. This marked the third consecutive month that the two major indicators for current and future economic outlooks both contracted.

Spending and corporate investment remained weak last month.

Retail sales grew 3.6 percent from a year earlier, but from March, sales declined 1.1 percent. Facility investment posted 5.7 percent on-month shrinkage, caused by less corporate spending on transportation equipment, the report showed.

The factory operating rate declined last month as well. The nation’s manufacturing plants operated at 80.5 percent of capacity, down 2 percentage points from a month earlier, according to the report.

The government said last month’s slowing output might have been caused by “one-off” factors, and industrial production will soon rebound, given the current economic conditions at home and abroad.

“Worsening trade conditions caused by such factors as maintenance of some production facilities and high oil prices coupled with supply disruption of components led to the sluggish output last month,” the finance ministry said in a separate report.

“Facility maintenance in chemical and automobile industries is now in its final stage, and anxiety over supply disruption is also easing as production lines in Japan are steadily back in operation,” the ministry said. “Given the current economic conditions at home and abroad, output will likely keep its recovery trend.”

(Yonhap News)