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(2nd LD) Industrial output falls by most in 18 months in Oct.

10:11 November 30, 2021

(ATTN: UPDATES with more info in paras 6, 14, 15, 20, 21)
By Kim Soo-yeon

SEOUL, Nov. 30 (Yonhap) -- South Korea's industrial output fell by the most in 18 months in October as production in the manufacturing sector lost steam amid global supply chain bottlenecks, data showed Tuesday.

Industrial output declined 1.9 percent in October from the previous month, reversing from a 1.1 percent on-month gain in September, according to the data compiled by Statistics Korea.

It marked the largest on-month fall since April 2020, when industrial output fell 2 percent.

From a year earlier, industrial output rose 4.8 percent.

Output in the manufacturing sector declined for the fourth consecutive month in October, affected by a global supply chain squeeze.

Manufacturing output declined 3.1 percent on-month mainly because a global shortage of auto chips dented vehicle production. Auto output fell 5.1 percent last month, and semiconductor production shed 1 percent.

This file photo, taken Nov. 11, 2021, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

Retail sales, a gauge of private spending, rose for the second straight month in October as economic activity increased amid the vaccine rollout.

Retail sales gained 0.2 percent on-month in October, compared with a 2.4 percent on-month increase in September.

Facility investment fell 5.4 percent on-month last month, following a 1.8 percent on-month decline in September.

The statistics agency said economic recovery momentum has slowed down, coupled with fewer working days and September's high base effect.

South Korea used alternative holidays to create two back-to-back extended weekends in October in an effort to help prop up domestic demand.

"Economic uncertainty remains high, given the virus situation, global supply chain disruptions and rising commodity prices," Eo Woon-sun, a senior Statistics Korea official, told reporters.

But he said it is too early to say that economic recovery momentum has been sapped solely with the October data.

Finance Minister Hong Nam-ki said production and consumption for November are expected to be good, given robust exports and improving domestic demand.

"Downside risks from supply chain challenges and rising inflation linger. Uncertainty about the pandemic is also growing due to a flare-up in virus cases here and concerns about the new (omicron) variant," Hong wrote on his Facebook page.

Asia's fourth-largest economy is on a recovery track on the back of robust exports of chips and petroleum products.

The country implemented the "living with COVID-19" scheme on Nov. 1 with eased virus restrictions in a bid to gradually return to normal life.

Economic policymakers expect the relaxed virus curbs to boost private spending.

But spikes in COVID-19 cases and the emergence of the omicron variant are raising concerns that economic uncertainty could heighten.

South Korea reported 3,032 more coronavirus cases Tuesday, raising the total to 447,230. The country has been grappling with spikes in deaths and critical cases since it began easing virus curbs early this month. Critically ill patients hit a record high of 661.

On Sunday, South Korea imposed an entry ban on foreign arrivals from eight African countries, including South Africa and Botswana, to block the inflow of the omicron variant.

Asia's fourth-largest economy grew 0.3 percent in the third quarter from three months earlier, slowing from a 0.8 percent on-quarter gain in the second quarter, according to central bank data.

Exports, which account for half of the economy, remain solid despite global supply chain disruptions. Exports, which account for half of the economy, grew 24 percent on-year in October, extending their gains for the 12th straight month.

Private spending contracted 0.3 percent in the July-September period from three months earlier, slowing from a 3.6 percent on-quarter gain three months earlier.

This photo, taken Nov. 15, 2021, shows a side street full of restaurants and eateries in the shopping district of Myeongdong in central Seoul. (Yonhap)

sooyeon@yna.co.kr
(END)

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