The manufacturing industry improved nationwide, but… Consumption is a respread direct hit

Input 2020.12.28 12:00

Metropolitan area’semiconductor’, Daegu Gyeongbuk’parts’… Most manufacturing production improvement
Consumption in metropolitan area and Gangwon area after corona… “Keep current level in the future”

In the fourth quarter of this year, the regional economy was found to have maintained the level of the previous quarter despite the spread of the novel coronavirus infection (Corona 19). This is due to the increase in manufacturing production in most regions except Honam and Jeju. Excluding the metropolitan area and the Southeast and Honam areas, exports also increased slightly. On the other hand, as the service industry was directly hit by the re-proliferation of Corona 19, consumption decreased in the metropolitan area and Gangwon area, and remained flat in the rest of the region.

According to the’December Regional Economic Report’ published by the Bank of Korea on the 28th, manufacturing production in the metropolitan area, Southeast area, Chungcheong area, Daegyeong (Daegu Gyeongbuk), and Gangwon area slightly increased during the fourth quarter, and Honam area and Jeju area showed a steady increase.

The metropolitan area, where semiconductor factories are concentrated, has benefited from the recovery of exports. As semiconductor and display demand for smartphones recovered, mechanical equipment increased slightly thanks to China’s infrastructure investment. Production increased mainly in mechanical equipment in the Southeast region, semiconductors and displays in the Chungcheong region, and automobile parts in the Daekyung region. In the Gangwon area, cement and Badong car parts increased.

On the other hand, in the Honam region, production increased mainly for high-value-added ships due to the recovery of the shipbuilding industry, but oil refining decreased due to the contraction in demand. In the Jeju area, non-alcoholic beverages and foodstuffs continued to maintain the previous quarter’s level despite an increase in alcoholic beverages.

Unlike the manufacturing industry, production in the service industry remained sluggish in the fourth quarter. The Daekyung and Gangwon areas decreased slightly compared to the third quarter. In the Daekyung area, group events around Gyeongju were canceled and travel demand decreased. As demand for winter ski resorts and resorts in Gangwon Province declined and local events fell sharply, the aftermath of the re-proliferation of Corona 19 was not avoided.

In the metropolitan area, the wholesale and retail business and education service businesses remained unchanged due to the strengthening of social distancing measures. In the Southeast area, the real estate business increased due to the increase in housing sales and jeonse prices, but the tourism industry contracted. In the Chungcheong area, transactions declined in 4Q due to the burden of a sharp rise in housing prices in the previous quarter, and the transportation industry in Jeju was sluggish due to a decrease in group tourists.

The contraction in the service industry led to sluggish consumption. Consumption, which temporarily increased in October due to easing of distance, shrank again as the number of confirmed cases surged after mid-November. The metropolitan area decreased mainly in the consumption of services such as entertainment and culture, while the Gangwon area decreased in the focus of furniture and home appliances, vehicle fuel, and cosmetics.

The BOK said, “In the future, consumption will be partially positively affected by the government’s third disaster subsidy payments, but the recovery of consumer sentiment will be limited due to deteriorating household income conditions and employment conditions, and the level of the fourth quarter will continue in all regions.” .