S. Korea's industrial production, investment fall in May on weak export

Source: Xinhua| 2019-06-28 17:53:07|Editor: Yamei
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SEOUL, June 28 (Xinhua) -- Both industrial production and facility investment in South Korea fell for the first time in three months on weak export, caused by the U.S.-initiated trade dispute, a government report showed Friday.

The seasonally adjusted production in all industries, which exclude agriculture, forestry and fishery industries, slipped 0.5 percent in May from a month earlier, according to Statistics Korea.

It was the first decline in three months after growing 1.2 percent in March and 0.9 percent in April respectively.

The reduction came from the continued fall in export, which kept sliding for six straight months through May. The U.S.-initiated trade dispute hit hard the South Korean economy, which depends on export for about half of its gross domestic product (GDP).

The country's real GDP, adjusted for inflation, retreated 0.4 percent in the first quarter from the previous quarter.

Output in the mining and manufacturing sectors diminished 1.7 percent in the month, with the production among builders skidding 0.3 percent.

The diminutions were offset by the services industry, of which production grew 0.1 percent in May from the previous month. Output in the public administrations sector increased 0.5 percent.

Production among manufacturers contracted 1.5 percent in the month on slump in the oil-refining, metal-processing and food and beverage sectors.

The average capacity ratio in the manufacturing sector declined 1.3 percent last month amid the reducing outbound shipment.

The ratio of inventory to shipment for manufacturers gained 2.6 percentage points over the month to 118.5 percent in May, marking the highest in over 20 years since September 1998.

Hit by the weak export and the lower production, facility investment retreated 8.2 percent in May from the previous month. It was the first fall in three months after expanding 10.1 percent in March and 4.6 percent in April.

However, retail sales, which gauge private consumption, rose 0.9 percent in the month on the government's efforts to narrow income gap by raising earnings among the low-income bracket.

The sale of non-durable goods such as food and beverage declined last month, but the sales of semi-durables and durable goods, including clothing and electronic products, advanced in the month.

Machinery orders declined 4.2 percent on lower demand in the private sector that offset a surge in demand from the public sector.

Completed construction fell 0.3 percent in May from a month earlier, while construction orders tumbled 36.6 percent last month on a yearly basis.

The cyclical factor for leading indicators, which measure outlook for future economic conditions, shed 0.2 points in May from a month earlier, but the figure for coincident indicators added 0.2 points last month.

Amid the economic slowdown, the government submitted a supplementary budget plan to the National Assembly, but the parliamentary session had yet to be opened amid the political wrangling over the revised election law.

Expectations emerged for the country's central bank to cut its benchmark interest rate from the current 1.75 percent in the near future to tackle the economic slump.