South Korea's industrial output shrank for the third straight month in March amid worries that its economy is losing steam in the face of toughened market conditions at home and abroad, a government report showed Tuesday.
According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries dropped 2.6 percent last month from a month earlier, the sharpest contraction in 12 months.
This also marked the third on-month contraction following a 1.2 percent fall and a 0.9 percent decline in January and February.
The output shrank 3 percent from a year earlier as well. This is the second consecutive month of declines since February when it dropped by a revised 9.4 percent.
"The March industrial output fell as production in manufacturing, electricity, gas and other areas except for the mining sector all contracted," the report said.
The report augmented the concerns that the country's economic growth might be losing steam amid a prolonged period of the growth rate remaining at substantially low levels.
Last week, the Bank of Korea reported that the country's gross domestic product grew 0.9 percent in the first quarter from three months earlier. The growth rate remained under 1 percent for eight consecutive quarters.
Exports edged up 0.2 percent on-year in March but experts worry that the continued weakening yen of Japan could undercut the country's exports growth down the road.
The government remains alert for a further deterioration of the economic conditions. On Friday, Finance Minister Hyun Oh-seok told lawmakers that the economic conditions are "getting worse as time goes by."
Taking notice, the government recently drew up a housing market stimulus measure and a 17.3 trillion won (US$15.6 billion) extra budget proposal in a bid to kick-start the sluggish economic growth.
Meanwhile, the manufacturing sector seems to have been hard hit by the slowing economy.
Production in the manufacturing sector dropped 2.5 percent on-month in March, mostly driven by sluggish demand for automobiles and communication devices, according to the report.
The average facility operating ratio in the manufacturing sector also slowed to 75.7 percent, down 1.9 parentage points from February.
Corporate spending remained weak. The report showed that facility investment fell to 6.6 percent in March from a month earlier and shrank 9.2 percent from a year earlier.
Consumer spending, however, slightly improved, with retail sales growing 1.4 percent on-month in March, the first expansion in three months. They also grew 1.7 percent compared with a year earlier. (Yonhap News)
