South Korea industrial production eases drastically in June

Industrial production in South Korea during the month of June eased drastically; however, it remained above what markets had expected, relieving the steep downturn. However, the minimal rise in IP is due to increased production of chemical products during the period.

Production in the mining, manufacturing, gas and electricity industries edged up 0.8 percent last month from a year ago, data released by Statistics Korea showed Friday. The June figure marked the second consecutive positive growth, following a 4.7 percent jump in May.

However, industrial output fell 0.2 percent m/m in June, compared to that in May. Production in the service sector jumped 5.4 percent from a year earlier, with a 1 percent on-month gain. For all industries, output jumped 4.8 percent on-year in June and climbed 0.6 percent from a month earlier, the report said.

In addition, the country’s outbound shipments fell 2.7 percent in June, slowing down from a 6 percent drop in May, on the back of rising shipments of semiconductors and vessels. Production of semi-conductors soared percent from a year earlier, and chemical goods rose 4.6 percent y/y, offsetting a 4.4 percent fall in car manufacturing.

"The country's production side has been on a recovering mode throughout this year, compared with the previous year," said Eo Woonsun, Director, Short-term Industrial Statistics Division, Statistics Korea.

Meanwhile, South Korean exports decreased for 18 straight months in June, while domestic consumption continued its upswing to 8.9 percent in June, marking the highest on-year gain since January 2011, when it hit 10.8 percent.