The number of people employed in the manufacturing sector, the backbone of the Korean economy and the core of industrial production, has decreased by nearly 100,000. This is the largest decline in 19 months since April 2023. For the first time since the COVID-19 pandemic, the number of workers in the manufacturing sector has fallen below 4.4 million.
Due to the decline in the construction sector, the number of employees in construction has decreased for seven consecutive months, while employment in the wholesale and retail sectors has declined for nine consecutive months due to sluggish consumer demand. These are key indicators of the domestic economic slowdown in the November employment trends.
According to employment trends for November 2024, released by Statistics Korea on the 11th, the number of people employed in the manufacturing sector last month was 4.396 million, a decrease of 95,000 compared to the same month last year. It is the first time in four years that the number of manufacturing workers has fallen below 4.4 million for the month. In November, the number of manufacturing workers fell by 190,000 when compared to the previous month.
Statistics Korea explained that the sharp decline in the number of people employed in manufacturing is due to the slowed growth in sectors such as automobiles and food products, where production has been relatively smooth, while the decline in employment in electronics, clothing, and paper industries has widened.
The number of people employed in the manufacturing sector began to decline in July, reducing by 11,000. This continued through August (-35,000), September (-49,000), and October (-33,000), with the number falling below the 50,000 mark, and then dropping by nearly 100,000 in November. If this trend continues, the decrease is expected to exceed 100,000 in December. This is due to the base effect of an increase in employment last December.
In November, the number of construction workers also decreased by 96,000. This marks the seventh consecutive month of decline since May. The decrease has approached the 100,000 mark for three consecutive months. The Ministry of Strategy and Finance analyzed that “the decline in construction employment continues due to the slowdown in construction orders.”
The number of workers in business facilities also decreased by 86,000, recording a decline for 12 consecutive months. Business facilities refer to services such as manpower supply and employment mediation. These mainly involve jobs like cleaning staff, apartment security, and construction site labor mediation. The decrease in employment in construction-related sectors, such as construction and business facilities, totals to 182,000.
Cho Seongjoong, a director at the Ministry of Strategy and Finance, said, “The number of workers in business facilities continues to decline, focusing on construction site labor mediation.” In this regard, Seo Unjoo, director of the social statistics bureau at Statistics Korea, explained that “as platform services related to labor supply advance, the number of related employees is decreasing,” noting that “the aftermath of a sluggish construction economy also had an impact.”
Employment in the wholesale and retail sectors is also sluggish. In November, the number of employees decreased by 89,000 compared to the same month last year. Although the rate of decline slowed compared to the previous month's decline (148,000), many believe that a reversal is not easy in the interim due to poor consumer trends.
Concerns arise regarding the future domestic market outlook, given that employment in manufacturing, construction, and retail is directly linked to consumption. The decrease of 180,000 in young workers, who have a relatively high spending power, is also a negative signal for the domestic market. The increase of 123,000 in the number of employed people in November was influenced by those in their 60s (+298,000), and by sector, in health and welfare (+113,000), and education services (+106,000).
Woo Seokjin, a professor of economics at Myongji University, noted, “Good jobs in the country primarily come from manufacturing. They are stable and offer relatively high pay levels.” He added, “While youth employment is decreasing, employment among the elderly is increasing. The increase in health and welfare services, and a decrease in manufacturing indicate a deterioration in the quality of employment itself.” Professor Woo continued, “Considering the employment elasticity according to growth rates, the current increase in the number of employed people does not meet the expected levels according to growth rates. Typically, with a 2% growth, the number of employed should increase by nearly 200,000,” adding, “It shows that the growth engine is stalling.”
The government held a joint task force (TF) meeting with related ministries to discuss support measures for vulnerable employment groups. During the meeting, Kim Beomseok, Vice Minister of the Ministry of Strategy and Finance, pointed out, “The employment decline in construction and manufacturing and difficulties among vulnerable employment groups such as youth and small business owners persist,” adding, “We will intensify job support for vulnerable groups by holding focused job fairs.” Kim Minseok, Vice Minister of the Ministry of Employment and Labor, said, “With increasing internal and external uncertainties and ongoing difficulties centered on youth and the construction sector, we will actively strive to create a stable employment environment.”