Last month, production across all industries increased, but both consumption and investment decreased. In particular, poor sales of durable goods and a decline in investments centered on machinery appear to have hindered domestic recovery.
According to the 'March 2025 industrial activity trends' released by the Statistics Korea on the 30th, although total industrial production (seasonally adjusted) decreased in sectors like services (-0.3%), it increased by 0.9% compared to the previous month due to a rise in mining and manufacturing (2.9%).
Production in the mining and manufacturing sector decreased in some items such as machinery (-3.1%), but production significantly increased, particularly in semiconductors (13.3%) and pharmaceuticals (11.8%). Notably, semiconductor production rose by 26.8% compared to the same month last year, driving the production expansion. Pharmaceutical (20.8%) and metal processing (14.7%) also saw increases compared to the same month last year.
Overall manufacturing production increased by 3.2% compared to the previous month. While there were declines in sectors like machinery and petroleum refining, there was a recovery trend centered on high-tech manufacturing, including semiconductors, pharmaceuticals, and electronic components (7.8%). The semiconductor sector has not yet been significantly impacted by the strengthening of tariffs from the U.S., resulting in pronounced increases.
Production in the services sector decreased by 0.3% compared to the previous month. While retail (-3.5%) and finance/insurance (-2.1%) declined, there were increases in healthcare/social welfare (3.0%) and transportation/storage (4.2%). Compared to the same month last year, the accommodation/restaurants (-3.7%) sector struggled, while professional/scientific/technical (3.6%) and arts/sports/recreation (13.9%) sectors showed signs of growth.
Consumption still experienced a slow recovery. The retail sales index stood at 103.1 (2020=100), which is a 0.3% decrease compared to the previous month. Although sales of non-durables (2.8%) and semi-durables (2.7%) increased, the sale of durable goods, including communication devices and computers, dropped 8.6%, pulling down overall consumption. The contraction in high-priced durable goods consumption was distinctly evident.
Investment in facilities increased in the transport equipment sector (3.4%), but the decline in machinery such as agriculture, construction, and metal machinery (-2.6%) impacted the overall investment, resulting in a 0.9% decrease compared to the previous month. In particular, the significant reduction in machinery, which accounts for a large share of facility investment, led to the overall sluggish investment.
Construction performance decreased by 2.7% compared to the previous month as both civil engineering (-6.0%) and construction (-1.5%) recorded declines in work performance. The contraction in the construction market, which has continued since the second half of last year, appears to be ongoing.
Economic indicators showed some signs of improvement. The coincident composite index of current economic conditions rose by 0.3 points to 98.8 compared to the previous month. The leading composite index, which forecasts future economic trends, also increased by 0.2 points to 100.6.