Enter 2021-01-29 10:21 | Revision 2021-01-29 10:23
▲ A busy restaurant.ⓒ Yonhap News
It was found that the domestic industrial production index declined 0.8% from a year ago due to the Corona 19 (Wuhan pneumonia) shock from China last year. It declined for the first time since 2000, when related statistics were started. Consumption also declined due to the Corona 19 incident. However, facility investment increased mainly for machinery.
Last month, when the third spread of Corona 19 began in earnest, as social distancing was strengthened, purchases of food and beverages increased, and even the base effect overlapped, breaking expectations and consumption slightly rebounded.
The cyclical fluctuation of the leading economic index, which predicts the future economic situation, continued to rise for 7 months. It is interpreted as the result of the anticipation of the economic recovery following the development of the Corona 19 vaccine.
◇Last year production… Mining industry 0.4%↑·Service industry 2.0%↓
According to the 2020 industrial activity trend released by the National Statistical Office on the 29th, the total industrial production (seasonal adjustment) index excluding agriculture, forestry and fishery last year was 107.2 (2015 = 100), down 0.8% from a year ago. It was the first time since 2000, when relevant statistics were released. Production fell a lot in the construction and service industries. The production of the mining industry increased by 0.4% from the previous year, decreasing in automobiles and metal processing, and increasing in semiconductors and mechanical equipment. The manufacturing industry’s average utilization rate was 71.3%, down 1.9 percentage points (p) from the previous year. The production of the service industry also fell 2.0% from the previous year. The increase in finance, insurance, and real estate due to the increase in stock market and real estate prices such as’Three Thousand P’and’Cheon’s Dock’, but the decline in transportation, warehouses, lodging, and restaurants was large as the travel and tourism industries were hit by Corona 19.
Consumption decreased by 0.2% from the previous year as sales of durable goods such as passenger cars (10.9%) increased due to the impact of individual consumption tax cuts and new car launches, but semi-durable goods such as clothing (-12.2%) and non-durable goods such as cosmetics (-0.4%) decreased. It rebounded in the second quarter and continued to increase until the third quarter, but in the fourth quarter it turned back to decline.
In terms of facility investment, investment in transportation equipment such as aircraft (-0.3%) decreased, but increased by 6.0% from the previous year as investment in machinery such as special industrial machinery (8.6%) increased.
Construction performance, which shows the actual construction performance of construction companies in terms of amount, increased civil works (5.5%), but construction (-5.2%) decreased, down 2.3% from the previous year. Construction orders (Gyeongsang) increased from construction (27.3%) such as houses, factories and warehouses, while civil engineering (-15.0%), such as power generation and communications, rose 15.8% from the previous year.
▲ Mutual rise in production, consumption, and investment in December last year.ⓒ Yonhap News
◇’Triple increase’ in production, consumption and investment in December last year
Looking at the trends in December of last year, production, consumption, and investment all increased with the strengthening of social distancing. All industrial production was hit by Corona 19, which hit service industries such as lodging and restaurants (-27.3%), but exports of semiconductors (11.6%) were robust, and mining industry production increased by 0.5% from the previous month (November). However, the growth rate slowed from the previous month (0.8%). The mining industry’s production increased by 3.7% from the previous month, which decreased in automobiles (-8.6%), and increased in memory semiconductors such as DRAM and flash, and mechanical equipment such as wafer (silicon substrate) processing equipment (10.0%). Compared to the same period a year ago, automobiles (-6.6%) were sluggish, but semiconductors (18.6%) led the increase.
Manufacturing inventory fell 0.2% from the previous month. It decreased in automobiles (6.3%) and oil refining (8.3%), while in semiconductors (-7.9%) and electrical equipment (-3.0%). The manufacturing capacity index was 106.1, up 1.5% from the previous month. The capacity index refers to the maximum amount a business can produce in a normal operating environment. The manufacturing industry’s average utilization rate was 74.5%, up 0.6%p from the previous year. It increased for two consecutive months.
Service production increased in finance and insurance (4.6%) thanks to the booming stock market, but decreased 1.1% from the previous month in transportation and warehouses (-3.2%) such as lodging and restaurants, as well as rail and air passenger transportation, due to strengthening social distancing. .
The retail sales index, which shows consumption trends, was 114.3, up 0.2% from the previous year. The National Statistical Office explained that the base effect of the two consecutive months of decline in October (-1.0%) and November (-0.9%) also worked. Durable goods such as passenger cars (-1.7%) and semi-durable goods such as clothing (-6.7%) decreased. On the other hand, sales of non-durable goods (3.9%) such as food and beverages increased as the time to stay in the house increased due to the re-proliferation of Corona 19.
Facility investment increased 0.9% from the previous year. Investment in machinery such as special industrial machinery (0.2%) and transportation equipment such as ship imports (3.4%) increased.
Construction performance, which shows the actual construction performance of construction companies in terms of amount, increased civil engineering (6.2%) construction performance, but decreased construction (-3.6%), down 0.9% from the previous month. Construction orders (Gyeongsang) decreased in civil works (-27.9%), but increased from construction (17.6%), up 2.0% from the same period a year ago.
The economic index, which had risen together for six consecutive months, slowed. The cyclical fluctuation of the companion index showing the current economic situation was 98.9, the same as the previous month. The number of non-farm, forestry and fisheries employment and retail sales index decreased, while the service industry production index and mining industry production index increased. The cyclical fluctuation of the leading economic index predicting the future economic situation was 103.0, up 0.5p from the previous month. It is rising for seven consecutive months. It is the longest consecutive increase since it rose for 9 consecutive months from November 2016 to July of the following year. It has exceeded 100 for six consecutive months since last July. The extent of the increase is also growing. Although the export/import price ratio and inventory circulation indicators decreased, it was analyzed that the KOSPI and machinery export index increased.
