South Korea’s industrial output shrank for the second straight month in August amid growing uncertainties surrounding global market situations, a government report showed Friday.
According to the report by Statistics Korea, production in the mining and manufacturing industries fell 1.9 percent last month from July, following the previous month’s 0.3 percent contraction.
The output still grew 4.8 percent compared with a year earlier, marking the 26th consecutive on-year expansion since July 2009, the report showed.
“The output growth is faltering but it seems to be affected partly by temporary and seasonal factors such as repairs of vehicle facilities and movement of some auto plants last month,” Finance Minister Bahk Jae-wan said. “We need to wait and see further to figure out its future direction.”
Production of vehicles, semiconductors and components remained sluggish, leading the overall on-month output contraction in August. In particular, vehicle production fell 6.7 percent from a month earlier.
The data comes as South Korea is facing heightened uncertainty caused by external factors, such as the eurozone debt crisis and economic slowdowns in other major economies, including the United States.
Policymakers here are on high alert against rising global market uncertainties to head off any similar crisis affecting the nation’s export-dependent economy.
On Wednesday, the Finance Ministry said that it will move into emergency mode in running economic policies by replacing its weekly policy coordination meeting with a “crisis” management gathering.
The statistics agency’s report also painted a relatively gloomy picture of the economic situation. The indexes that measure current and future economic conditions both remain unchanged from July, putting an end to their third straight month of improvements, the report showed.
Retail sales rose 5.2 percent from a year earlier, but they edged down 0.2 percent from July. Facility investment also shrank 3.7 percent from the same period a year earlier.
The construction sector remained in a slump. Building projects completed in August dropped 9.2 percent from a year earlier.
Compared with a month earlier, they inched up 1.1 percent, the report showed.
The factory operating rate declined. Manufacturing plants operated at 80.5 percent of capacity last month, down 1.6 percentage points from a month earlier, according to the report.
In an analysis of the statistics agency’s data, the finance ministry said the South Korean economy is faced with “increasing uncertainties” stemming from worries over Europe’s fiscal debt problems and stagnating economic recovery in advanced countries.
“We will thoroughly monitor financial and real economic trends at home and abroad while at the same time managing our macroeconomic policy flexibly to cope with changing external situations,” the ministry said.
(Yonhap News)
