World Economy

S. Korea Retail Sales Lowest in 4 Years

S. Korea Retail Sales Lowest in 4 YearsS. Korea Retail Sales Lowest in 4 Years

Retail sales in South Korea shrank the most in more than four years in the aftermath of the outbreak of Middle East Respiratory Syndrome (MERS), a government report showed Friday.

Retail sales, which reflect private consumption, declined 3.7% in June from a month earlier, the fastest slide since February 2011 when the sales in retail stores dropped 5.8%, according to Statistics Korea, Xinhua reported.

Sales in department stores and discount outlets posted a double-digit reduction last month, and convenient store sales inched down 0.2%. Sales in semi-durable goods such as clothes plunged 12.1%, leading the June decline. Demand for durables and non-durables like cosmetics dipped 1.6% and 1.1% respectively.

The MERS outbreak, which began here with the report of the first patient on May 20, infected 186 people, among whom 36 passed away. The outbreak peaked in June when consumers refrained from going outside for shopping or entertainment, dampening the already weakened domestic demand.

Production among service companies fell 1.7% in June from the previous month due to the MERS shocks, but the production inched down 0.1% during the April-June period.

Output in overall industries, including the manufacturing, services, construction and public administration, rose 0.5% in June from a month earlier, the first increase in four months. Industrial output declined 0.5% in March, 0.4% in April and 0.6% in May respectively on a monthly basis, before rebounding last month.

The rebound was driven by production in the manufacturing and mining industries, which gained 2.3% last month. Exports kept sliding in June, but the falling pace slowed after posting a double-digit decline in May.

Regular maintenance and renovation of facilities in the oil-refining industry ended last month, driving the sector’s production to increase 7.7% in June from a month earlier. Production in the machinery equipment and auto sectors rose 5.3% and 3.1% each.

Manufacturers logged an average capacity rate of 75.2% in June, up 2 percentage points from the previous month. Inventory among the companies increased 3% last month. Facility investment increased 3.8% on rising investment in machinery equipment.