The Korea Development Institute (KDI) evaluated that the service industry’s sluggishness is intensifying due to the re-proliferation of Corona 19 since mid-November last year.
KDI pointed out in the’January Economic Trends’ announced on the 10th, “The service industry is intensifying due to the re-proliferation of the nationwide corona 19 and strengthening quarantine measures.”
It is believed that the possibility of economic contraction has further expanded as we believe that the slump is intensifying, mainly in the service industry.
According to Shinhan Card’s estimated credit card sales for December last year, it decreased by 16.2% compared to the same month last year, similar to that of March (-16.5%), the first coronavirus pandemic.
Credit card sales decreased by 2.4% in October and 4.2% in November.
It is estimated that the extent of the decline has expanded considerably as measures have been taken to strengthen quarantine nationwide, such as raising the social distancing in the metropolitan area to 2.5 stages in December.
In response, KDI said, “As the spread of Corona 19 in December deepens, credit card sales have sharply decreased and consumer sentiment index has declined. Consumption is believed to have greatly contracted.” As quarantine measures such as business restrictions in some service industries are reinforced, there is a possibility that sluggish consumption, mainly in the service industry, will intensify.”
In the case of the manufacturing industry, it was found that durable goods consumption, facility investment, and product exports increased, leading to a recovery trend.
In November of last year, consumption of durable goods increased by 12.8%, and facility investment also increased by 5.7%, which was higher than the previous month (-0.9%), mainly for machinery.
KDI analyzed that capital goods imports in December, a leading indicator of facility investment, increased 23.3%, showing the possibility of continued investment improvement in the future.
In the case of exports, in December of last year, it increased by 12.6% compared to the same period of the previous year to $ 5.11 billion.
By item, semiconductors (30.0%), displays (28.0%), and wireless communication devices (39.8%) showed an increase.
KDI said, “Recently, while the cyclical fluctuation of leading indexes has risen and semiconductor-related indicators maintain a good trend, it is suggesting that the manufacturing industry will continue to improve in the future.” As it continues, the gap between manufacturing and service industries is widening.”