Statistics Korea’industrial activity trend’… last year’s industrial production 0.8%↓
2% production of services such as accommodation and restaurants↓
Retail sales declined sharply in 17 years
Semiconductor and financial industry advances reduce shock
Production, consumption and investment’triple rebound’ in December
Deputy Prime Minister Hong Nam-ki “gradually strengthening economic resilience”
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Industrial production recorded negative for the first time in history last year in the aftermath of the novel coronavirus infection (Corona 19). Retail sales declined the most in 17 years since 2003 (-3.1%), when the Korean economy suffered from measles due to the card crisis. Analysts say that the Korean economy has defended some extent of the index decline thanks to the booming semiconductor and real estate and stock markets.
According to the’December 2020 and Annual Industrial Activity Trends’ released by the National Statistical Office on the 29th, the overall industrial production index decreased by 0.8% compared to the previous year. It is the first time since 2000 when related statistics were compiled that the entire industrial production index recorded negative. The impact of the reduction in service industry production, which was hit directly by Corona 19, was large. Service industry production declined 2.0%, and sales fell sharply due to social distancing measures, such as accommodation and restaurants (-18.5%), transportation and warehouses (-14.2%), and arts, sports, and leisure (-33.0%). . On the other hand, production in real estate and stock market-related services such as real estate (5.6%) and finance and insurance (14.0%) increased, showing the polarization caused by Corona 19 clearly.
Manufacturing production increased 0.5% thanks to semiconductors, which are the backbone of the economy. With the revitalization of the’untact economy’ caused by Corona 19, the related market was booming, and semiconductor production surged 23.9% compared to the previous year. Mechanical equipment also increased by 5.5% and automobiles decreased by 10.2%.
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However, the manufacturing industry showed a recession, and the average utilization rate of the manufacturing industry last year was 71.3%, the lowest level in 22 years since the financial crisis at 67.6% in 1998.
In the aftermath of the contraction of domestic demand due to Corona 19, retail sales last year decreased 0.2% from a year ago. Although it has fully released finances such as the national disaster support fund, it has not been able to overcome the recession caused by Corona 19. Sales of durable goods such as cars (10.9%) increased due to tax benefits such as individual consumption tax cuts, but sales of semi-durable goods such as clothing (-12.2%) and non-durable goods such as cosmetics (-0.4%) decreased. In particular, the retail sales of duty-free shops decreased by 37.5% due to a sharp drop in tourists due to Corona 19.
Last year, facility investment increased by 6.0% due to the increase in investment in the semiconductor sector, while construction period, which represents the actual construction performance of construction companies, decreased by 2.3%.
Meanwhile, in December last year, production, consumption, and investment recorded a’triple increase’ compared to the previous month, raising expectations for an economic rebound this year. In December of last year, all industrial production increased 0.5% from the previous month, and consumption (0.2%) and investment (0.9%) also increased.
While the cyclical fluctuations in the economic coincidence index stepped in place, the cyclical fluctuations in the leading economic index, indicating expectations for the future economy, rose 0.5 points. The upward trend in the cyclical fluctuation of the leading economic index continued for seven consecutive months, rising for nine consecutive months from November 2016, and continued to increase for the longest consecutive period.
Deputy Prime Minister Hong Nam-ki and Minister of Strategy and Finance said on the day, “It is very meaningful that all industrial production in December continued to improve for two months in a row. Compared to the decline in all industrial production during the two proliferation periods (February and August 2020), it can be assessed that the resilience of the Korean economy is gradually strengthening.”
/ Sejong = Reporter Yang Chul-min [email protected]
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