Industry Trends
Industrial Trends
[November 2024] Industry Trends
2024.11.11
All Industries
Mining and manufacturing output rose sharply in August, led by gains in a number of industries, including automotive and semiconductors, which increased after being adjusted in the previous month. Services increased for three straight months, with summer holidays and an increase in foreign tourists boosting fuel, lodging and food, and leisure spending. Retail sales turned positive, with sales of non-durable goods (2.7 percent) and durable goods (1.2 percent) rising amid a decline in semi-durable goods (△0.9 percent). Capital investment fell after surging in the previous month, led by transportation equipment (△15.4 percent). Despite an increase in civil engineering projects (2.4 percent), construction completed fell due to a decline in construction projects (△2.4 percent). The coincident index cyclical change rate fell alongside sliding construction completed and imports, while the leading index cyclical change rate fell due to decreases in term spread and domestic shipments of machinery, but remained above the long-term trend of 100.
The South Korean economy needs to be closely watched as there are potential risks. On the production side, geopolitical risks, such as concerns over the spread of conflict in the Middle East, and uncertainty over elections and economic conditions in major countries remain. On the spending side, small business difficulties and household debt and real estate PF risks are downside risks.
South Korea’s overall industrial production rose in August 2024, with manufacturing and mining industries and retail sales rebounding and service industries rising for the third consecutive month.
| Subject | All industries | Mining & manufacturing |
Service | Retail sales | Capital investment |
Construction completed |
|---|---|---|---|---|---|---|
| ‘Aug. 2024 (%) | ∆1.2 | ∆4.1 | ∆0.2 | ∆1.7 | ▲5.4 | ▲1.2 |
Mining and manufacturing output rose sharply in August, led by gains in a number of industries, including automotive and semiconductors, which increased after being adjusted in the previous month. Services increased for three straight months, with summer holidays and an increase in foreign tourists boosting fuel, lodging and food, and leisure spending. Retail sales turned positive, with sales of non-durable goods (2.7 percent) and durable goods (1.2 percent) rising amid a decline in semi-durable goods (△0.9 percent). Capital investment fell after surging in the previous month, led by transportation equipment (△15.4 percent). Despite an increase in civil engineering projects (2.4 percent), construction completed fell due to a decline in construction projects (△2.4 percent). The coincident index cyclical change rate fell alongside sliding construction completed and imports, while the leading index cyclical change rate fell due to decreases in term spread and domestic shipments of machinery, but remained above the long-term trend of 100.
The South Korean economy needs to be closely watched as there are potential risks. On the production side, geopolitical risks, such as concerns over the spread of conflict in the Middle East, and uncertainty over elections and economic conditions in major countries remain. On the spending side, small business difficulties and household debt and real estate PF risks are downside risks.
※ Source: Ministry of Economy and Finance(moef.go.kr)
Trends by Industry
- Automotive
-
‘Exports Fell for the Second Month as EV Exports Continued Sliding’
→ July exports fell by 4.3 percent from a year ago as hybrid vehicle exports performed well but EV exports slowed. Imports in June decreased by 29.8 percent year-on-year on the back of weakening consumer sentiment and the last year’s base effect. Domestic consumption in June saw a decrease of 17.7 percent year-on-year with more consumers delaying purchases and due to last year’s base effect. Production continued to decline in June as domestic consumption remained slow and exports fell.
- Shipbuilding
-
‘Exports Fell Temporarily, but Production Continued Growing’
→ June production increased by 1 percent from a year ago, but shipments fell by 4.8 percent due to slow exports. July exports declined by 36.2 percent year-on-year due to the last year’s base effect and lower shipments. June imports fell by 33.2 percent from a year ago as imports of second-hand vessels slowed. The market condition improved in July as major container carriers saw their profitability improve and placed orders for large container ships.
- General machinery
-
‘Production Continued Falling, while Exports Turned Positive on the Back of Growing Global Infrastructure Investments’
→In June, production decreased by 3.6 percent year-on-year as domestic shipments increased but exports remained slow. July exports grew by 12.5 percent from a year ago, supported by strong exports to the US and the Middle East. Imports in June continued to decline (-2.4 percent) as downstream industries remained weak.
- Steel
-
‘ Production Continued Falling due to Sluggish Demands and Blast Furnace Renovation, while Exports Fell Less Rapidly’
→ In June, production fell by 10.4 percent year-on-year with the renovation of the Pohang No. 4 blast furnace slashing the capacity utilization rate, industries that use steel such as automotive and construction slowing down, and exports falling. Exports in July decreased by 5.4 percent from a year ago as export unit prices plunged despite improved demands from major buyers such as the US and ASEAN. June imports decreased by 23.6 percent from a year ago as weak domestic consumption slowed imports from major countries.
- Oil refining
-
‘ Despite Falling Unit Prices, Exports Grew by 16.7 percent YoY Supported by Volume Expansion ’
→ June production increased by 5.7 percent as refining margins improved and the country’s major refineries completed their regular maintenance. Exports grew for five months in a row in July, largely thanks to volume expansion.
- Wireless communication devices
-
‘Global Smartphone Market Recovery in Full Swing, with Exports up 53.6 percent YoY in July’
→ Exports have been on an upward trend since Q2, driven by the arrival of the new product replacement cycle and rising unit prices of smartphone parts. Compared to the same period of the previous year, production grew by 9.9 percent, exports were down by 0.1 percent, inventories increased by 12.5 percent, but capacity utilization rate increased by 11.7 percent in June. In the same month, imports were down 0.4 percent, driven by a sharp decline in smartphone imports while those of smartphone components surged.
- Semiconductor
-
‘Semiconductor Exports Remained Strong’
→ Exports reached nearly USD 11.2 billion in July, up 50.4 percent year-on-year and 52.2 percent year-on-year in the first half of the year. In June, the semiconductor production index grew by 26.9 percent year-on-year to 173.9, continuing a strong upward trend. On a monthly basis, the index grew by 8.1 percent to increase more rapidly from the previous month.
- Display
-
‘The Effect of New Product Launches Continued, but Exports Growth Slowed Compared to Last Year’s Strong Performance’
→ In June, production increased by 6.9 percent year-on-year and the capacity utilization rate gained 8.1 percent due to the effects of new product launches and new demands for OLED products. In July, exports saw a year-on-year increase of 2.4 percent as the effect of new IT product launches continued and the Paris 2024 Olympics boosted exports of TV panels.
* Please note that the latest data available in Statistics Korea are for the previous month in the case of exports and the month prior to the previous one for production.
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