Korea's industrial output falls 0.3% in March amid virus pandemic

SEJONG -- South Korea's overall industrial output fell 0.3 percent in March from a month earlier, data showed Wednesday, as the coronavirus pandemic hit exports and private consumption.

The data compiled by Statistics Korea, however, showed production in the mining, manufacturing, gas and electricity industries rose 4.6 percent from a month earlier.

From a year earlier, overall industrial output also gained 0.6 percent.

The output in the service sector declined 4.4 percent on-month, marking the sharpest drop since the agency started compiling the data in 2000.

In February, the nation's overall industrial output contracted 3.5 percent on-month, marking the sharpest decline since February 2011.

The economy, Asia's fourth largest, shrank 1.4 percent on-quarter in the first quarter of this year, the sharpest quarterly contraction since the last three months of 2008.

Exports sank 27 percent on-year in the first 20 days of April to US$21.7 billion.

March's unexpected gain in production of the mining, manufacturing, gas and electricity industries came after auto output jumped 45.1 percent on-month.

Ahn Hyung-joon, a senior official at Statistics Korea, told reporters that factory output in auto and auto parts firms soared as disruptions of the parts supply eased and auto sales rose on tax benefits.

Production of chips also increased 15.5 percent on-month, the data showed.

Local manufacturers have been facing hurdles in securing key parts as suppliers around the globe suspended their operations amid the pandemic, with global shipments of goods also being disrupted by entry bans.

The virus pandemic weighed on consumer sentiment as well, leading to a 1 percent decline in retail sales in March.

Sales of durable goods, such as cars, gained 14.7 percent, but those of nondurable ones, such as cosmetics, shed 11.9 percent, the data showed.

The so-called cyclical component of the composite leading index, which predicts the turning point in business cycles, fell by 0.6 point on-month, marking the sharpest decline since February 2008.

Vice Finance Minister Kim Yong-beom told reporters that South Korea may post a trade balance deficit in April, in what would be the first monthly shortfall in 99 months.

In the first 20 days of April, South Korea reported a trade balance deficit of $3.5 billion.

Kim said the March data on industrial output is better than those of other nations, but the global lockdown may take a heavier toll on the nation's exports in the coming months. (Yonhap)