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PRESS RELEASES

Production and Consumption Grow due to Strong Exports

  • DivisionEconomic Policy Bureau - Economic Analysis Division
  • DateApril 13, 2018
  • Tel0442152736

Current Economic Situation, April 2018

 

Production and Consumption Grow due to Strong Exports

 

 

The Korean economy continues to recover backed by strong exports.  Mining and manufacturing production, consumption and facility investment continued to rise.

 

The economy added 112,000 jobs year-on-year in March as manufacturing and construction continued to be strong and the service sector employment rebounded.  The young adult unemployment rate rose (11.3%→ 11.6%, y-o-y).

 

Consumer price inflation was 1.3 percent in March, rising even more slowly compared with 1.4 percent in the previous month, due to low agricultural product prices and public utility rates, as well as steady petroleum product prices.

 

Industrial production stayed flat in February (up 1.2%→ 0.0%, m-o-m).  Mining and manufacturing production increased for the second consecutive month (up 0.9%up 1.1%, m-o-m) due to strong automobiles and semiconductors.  Service output stayed flat (up 0.8%→ 0.0%, m-o-m) as transportation & storage services declined and meanwhile wholesale & retail and healthcare & social welfare services increased.

 

Retail sales increased in February (up 1.3% up 1.0%, m-o-m) backed by semi-durable goods, such as clothing, and nondurable goods, such as food.

 

Facility investment rose for the fourth consecutive month in February (up 5.4% up 1.3%, m-o-m) due to strong investment in transportation equipment.  Construction completed fell (up 8.1% down 3.8%, m-o-m), despite an increase in civil engineering works, due to a drop in building construction.

 

In February, the cyclical indicator of the coincident composite index rose 0.1 points from the previous month to 99.9, and the cyclical indicator of the leading composite index fell 0.2 points to 100.6.

 

Exports increased for the 17th consecutive month in March (up 6.1%, y-o-y) backed by strong major export items, such as semiconductors, amid recovering global economies.

 

In March, KOSPI rose after fluctuating amid concerns over North related risks and the spread of protectionism, and the dollar-won exchange rate fell as concerns eased over North related risks.  Government bond yields fell, despite the Fed’s rate hike, due to rising concerns about trade conflicts between the US and China.

 

Housing prices increased at a slower rate in March (up 0.20% up 0.12%, m-o-m) as housing price growth slowed down in the Seoul metropolitan area.  Jeonse (lump-sum deposits with no monthly payments) prices continued to fall (down 0.09% down 0.13%, m-o-m) as the prices in Seoul’s southern districts slipped.

 

The economy is expected to stay on a recovery path backed by improving global economies.  However, unemployment has been rising and external risks linger, such as trade issues and Fed’s interest rate hikes.

 

The government will strengthen its risk management, and will continue to work to improve the job market as well as the real economy through the 2018 economic policies and its recent measures aimed at increasing young adult jobs and stimulating the local economy.

 

 

Key Statistics

 

 

Employment

 

 

2015

2016

2017

2018

Annual

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Mar

Q1

Feb

Mar

Number of employed (million)

26.18

26.41

26.72

26.62

26.73

26.10

26.92

27.00

26.88

26.44

26.28

26.08

26.56

Employment rate (%)

60.5

60.6

61.2

60.9

60.8

59.6

61.3

61.4

61.0

60.3

59.6

59.2

60.2

(Seasonally adjusted)

60.5

60.6

60.6

60.7

60.8

60.9

60.8

60.8

60.9

61.0

60.9

60.7

60.9

 

 

Consumer Price Index

 

 

2017

2018

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

y-o-y

2.2

1.9

2.0

1.9

2.2

2.6

2.1

1.8

1.3

1.5

1.0

1.4

1.3

m-o-m

0.0

-0.1

0.1

-0.1

0.2

0.6

0.1

-0.2

-0.7

0.3

0.4

0.8

-0.1

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2

2016

2017

2018

Annual

Annual¹

Q3

Q4¹

Dec

Feb

Jan¹

Feb¹

Mining

(q-o-q, m-o-m)

-

-

0.8

-1.0

-2.0

-3.0

0.9

1.1

(y-o-y)

2.3

1.9

4.6

-3.8

-4.8

7.6

4.3

-6.4

Manufacturing

Production

(q-o-q, m-o-m)

-

-

0.6

-1.1

-2.5

-3.4

1.2

1.4

(y-o-y)

2.4

1.6

4.6

-4.8

-6.2

8.0

3.7

-7.2

Shipment

-Domestic consumption

-Exports

1.1

1.9

0.1

0.7

1.8

-0.4

0.9

0.9

1.3

-1.0

-1.1

-0.5

-3.8

-3.1

-4.1

-1.7

-1.1

-2.2

0.6

0.7

0.3

0.5

2.9

-3.5

Inventory3

-1.6

8.8

0.1

2.9

1.2

1.1

0.7

1.1

Average operation ratio

72.9

72.6

73.0

71.8

70.3

72.3

70.3

72.3

Production capacity

(y-o-y)

2.8

1.1

0.7

-0.1

-0.5

2.2

-0.1

0.2

  1. 1. Preliminary
  2. 2. Including mining, manufacturing, electricity and gas industry
  3. 3. End-period

 

 

Service Output

(q-o-q, m-o-m, %)

 

2015

2016

2017

2018

Annual

Annual

Annual¹

Q1

Q2

Q3

Q4¹

Nov¹

Dec¹

Jan¹

Feb¹

Service

activity index

2.9

2.6

1.9

0.7

0.5

0.9

0.2

1.4

-0.2

0.8

0.0

  1. 1. Preliminary

 

 

Retail Sales

(q-o-q, m-o-m, %)

 

2015

2016

2017

2018

Annual

Annual

Q3

Q4

Annual¹

Q1

Q2

Q3

Q4¹

Dec¹

Jan¹

Feb¹

Retail sales

4.1

3.9

-1.6

1.4

1.9

0.4

1.0

0.2

0.9

-2.6

1.3

1.0

(y-o-y)

-

-

3.1

2.2

-

1.6

1.0

3.2

2.1

1.4

1.2

6.3

  1. 1. Preliminary

 

 

Facility Investment Index

(q-o-q, m-o-m, %)

 

2015

2016

2017

2018

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Nov

Dec

Jan¹

Feb¹

Facility investment index

6.9

-1.3

14.1

6.0

3.1

0.2

-1.7

2.5

6.0

5.4

1.3

y-o-y

-

-

-

18.2

17.8

20.6

2.0

6.7

2.5

21.6

9.7

  1. 1. Preliminary

 

 

Construction Completed

(q-o-q, m-o-m, %)

 

2015

2016

2017

2018

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Nov

Dec

Jan¹

Feb¹

Construction completed (constant)

5.0

15.4

10.1

4.3

-0.2

-0.3

-0.1

-2.4

1.4

8.1

-3.8

y-o-y

-

-

-

17.7

13.6

12.7

-0.5

0.6

-0.4

15.3

0.9

  1. 1. Preliminary

 

 

Composite Index of Coincident and Leading Indicators

 

 

2017

2018

Jul

Aug

Sep

Oct

Nov

Dec¹

Jan¹

Feb¹

Cyclical indicator of coincident composite index

100.5

100.4

100.4

100.2

100.2

99.8

99.8

99.9

(m-o-m, %)

-0.1

-0.1

0.0

-0.2

0.0

-0.4

0.0

0.1

Cyclical indicator of leading composite index

101.2

101.1

100.9

100.8

100.7

100.7

100.8

100.6

(m-o-m, %)

0.2

-0.1

-0.2

-0.1

-0.1

0.0

0.1

-0.2

  1. 1. Preliminary

 

 

Exports and Imports

(US$ billion, y-o-y, %)

 

2015

2016

2017

2018

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Mar

Feb

Mar¹

Exports

526.76

495.43

573.69

132.06

147.04

151.05

143.54

48.64

44.86

51.58

(y-o-y)

-8.0

-5.9

15.8

14.6

16.7

24.0

8.4

13.1

3.9

6.1

Average daily exports

1.93

1.81

2.13

1.96

2.21

2.13

2.23

2.03

2.30

2.19

Imports

436.50

406.19

478.48

116.43

117.80

120.85

123.40

42.58

41.61

44.72

(y-o-y)

-16.9

-6.9

17.8

24.1

18.6

17.9

11.6

27.7

14.9

5.0

Average daily imports

1.60

1.49

1.78

1.72

1.77

1.70

1.91

1.77

2.13

1.90

1. Preliminary

 

Please refer to the attached PDF