SEOUL, July 31 (Xinhua) -- South Korea's industrial output fell in three months on the shortage of facility investment, which kept a downward trend for four straight months, a government report showed Tuesday.
Output in all industries shrank 0.7 percent in June from a month earlier, after growing 1.4 percent in April and 0.2 percent in May, respectively, according to Statistics Korea.
The reduction was mainly attributed to the softness of facility investment, which tumbled 5.9 percent in June from a month ago.
The capital spending by companies kept falling for the fourth consecutive month. It marked the first time in about 18 years that the facility investment maintained a four-month slump.
From a year earlier, facility investment plunged 13.8 percent in June, the biggest fall in five and a half years.
Domestic chipmakers made massive investment in facilities for the past 18 months or so, but the investment in the industry began making a correction.
The South Korean economy heavily relied on production and exports of semiconductor manufacturers. If the sector began correction, the overall economic growth could be negatively affected.
Production in the mining and manufacturing industries, which lead the country's industrial output, shrank 0.6 percent. Output among manufacturers declined 0.8 percent on lackluster activity in the automobile and chemical sectors.
Outlook for the local car industry got sour as the U.S. administration under President Donald Trump was reviewing the imposition of heavy tariffs on auto imports.
The U.S. protectionist moves were feared to stoke a global trade war, which would reduce global trade and negatively influence emerging economies, especially South Korea, whose exports account for about half of the economy.
Manufacturers recorded an average capacity ratio of 73.5 percent in June, down 0.5 percentage points from a month earlier. Inventory in the manufacturing sector gained 1.1 percent.
Production in the services industry gained 0.2 percent in June from the previous month. Output in the health and social welfare increased 2.4 percent on the rising number of hospitals and medical centers, while production in the finance and insurance industry rose 0.9 percent on strong lending demand.
Retail sales, which reflect private consumption, added 0.6 percent in the month. Demand for non-durables such as food and beverage picked up 2 percent, with semi-durable goods such as clothing rising 1.4 percent in sales.
The increased output among services companies and the higher retail sales were attributed to the higher number of Chinese tourists visiting South Korea.
Completed construction reduced 4.8 percent in June from the previous month on the decreased budget for social overhead capital (SOC).
The cyclical factor for leading economic indicators, which reflects economic outlook, edged down 0.1 point in June from a month earlier.
The figure for coincident economic indicators fell 0.2 points in the month, keeping falling for three months in a row.
