South Korea’s industrial output slipped at the steepest rate in more than two years in March due to a drop in production in the auto and machinery sectors.
According to data by Statistics Korea on Monday, the country’s industrial output decreased 1.2% in March from a month earlier, the largest drop in 26 months, Yonhap reported.
Production in the mining, manufacturing, gas and electricity industries fell 2.5% month-on-month in March. The average factory operation rate decreased 1.8 percentage points to 70.3%, the lowest level since March 2009.
Retail sales, an economic indicator for consumption, advanced 2.7% on-month, posting growth for the third consecutive month. Facility investment slipped 7.8% on-month, decreasing for the first time in five months.
The statistics office said a downturn in car production and machinery contributed to the dip in the March figures. Production of vehicles contracted 3.7% from a month earlier, and the machinery sector saw its output fall 4.3%.
“Auto exports remained in a slump last month, but private spending is keeping up its recovery pace,” said an official at the statistics office.
According to Statistics Korea, the seasonally adjusted mining and manufacturing output in March fell 2.5% on-month, the biggest month-on-month loss since February last year. Against a year-ago period, factory output slipped 4.5%.
Service sector output added 0.4% from the previous month thanks to the increased house transactions and restaurant businesses. Wholesale and retail sectors gained 1.3%, but finance and insurance sectors fell 1.8%.
Retail sales—a barometer for private consumption—rose 2.7%, sustaining growth momentum for the third month due to releases of new smartphones and cars.
