Industrial production and investment in May decreased compared to the previous month. Retail sales saw an increase in durable and semi-durable goods consumption, but non-durable goods consumption declined, resulting in a flat trend compared to the previous month. Retail sales decreased compared to the same month last year.
Despite the base effect of a triple decrease recorded in April's industrial activity trends, the industrial activity indicators continued a weak trend in May. The coincident cyclical fluctuation index, which shows the current economic flow, fell by 0.4 points (p), and the leading cyclical fluctuation index, which forecasts future economic trends, decreased by 0.1 p.
According to the 'May industrial activity trends' announced by the Statistics Korea on the 30th, the total industrial production index (seasonally adjusted, excluding agriculture, forestry, and fisheries) fell by 1.1% compared to the previous month to 112.5 (2020=100).
Overall industrial production has decreased by 1.6% in January this year, followed by increases of 0.7% and 1.1% in February and March, respectively. In April, it decreased by 0.8%.
In May, industrial production dropped by 2.9% in mining and manufacturing, 3.9% in construction, and 0.1% in services. Only public administration saw an increase of 0.8%.
In mining and manufacturing, production of primary metals increased by 1.5%, but production of pharmaceuticals (-10.4%) and metal processing (-6.9%) fell.
Manufacturing shipments decreased by 1.6% compared to the previous month, while inventories rose by 0.4%.
Service production increased by 2.8% in finance and insurance, but production fell in information and communication (-3.6%) and transportation and warehousing (-2.4%).
Retail sales of durable goods such as communication devices and computers increased by 1.2%, while semi-durable goods like clothing increased by 0.7%. However, non-durable goods consumption declined by 0.7%, resulting in a flat trend compared to the previous month. Compared to the same month last year, sales of durable goods such as automobiles increased, but sales of non-durable and semi-durable goods fell, leading to a decrease of 0.2%.
Director Choi Chang-yoon of the Statistics Korea service industry trends department noted, "While retail sales were flat compared to the previous month, they showed a decline compared to the same month last year," adding that "consumption has decreased compared to last year."
Investment in facilities decreased by 4.7% overall compared to the previous month, driven by a decline in machinery investment for semiconductor manufacturing (-6.9%).
Construction performance, as shown by the construction completion value, decreased by 3.9% compared to the previous month due to declines in both building (-4.6%) and civil engineering (-2.0%). Future construction activity, indicated by new construction orders, saw an increase in orders for dwellings, but significant reductions in civil engineering orders for power and telecommunications led to a 5.5% decrease compared to the same month last year.
The coincident composite index cyclical fluctuation index, which shows the current economic situation, declined by 0.4 points compared to the previous month, as both construction completion value and domestic exports indices decreased. The leading composite index cyclical fluctuation index, which forecasts future economic phases, also fell by 0.1 points compared to the previous month, due to decreases in construction order value and machinery domestic export indices.
Director Choi Chang-yoon stated, "Although there were signs of economic recovery recently, uncertainties both domestically and internationally caused the coincident composite index cyclical fluctuation index to switch to a decrease," adding that "it is a situation where we need to monitor future trends in the long term."