The manufacturing production, which is the backbone of our economy, has decreased by more than 4% compared to last year, marking the largest drop in 18 months.
According to the Korean Statistical Information Service (KOSIS) on the 9th, the manufacturing production index (base index, 2020=100) for January was recorded at 103.7, a decrease of 4.2% compared to the same month last year. This decline is the largest since July 2023 (-6.6%) in a year and a half.
The performance is poor even when compared to the previous month. The manufacturing production index (seasonally adjusted) for January was 111.6, a decrease of 2.4% from the previous month. Although production increased in other transportation equipment (2.8%) and pharmaceuticals (2.1%), there were significant declines in machinery equipment (-7.7%). The production index is seasonal, and thus, seasonally adjusted figures are used when comparing to the previous month.
As production fell, there was a downward trend in product shipments. In January, manufacturing shipments decreased by 7.4% compared to the same month last year, marking the largest drop in two years since January 2023 (-9.2%). Domestic shipments of products sold to local vendors fell by 11.8%, while export shipments to foreign markets decreased by 1.2%.
Compared to the previous month, manufacturing shipments declined by 6.2%. Domestic shipments decreased by 2.4% from a month earlier, while export shipments plummeted by 10.3% compared to the previous month. This contrasts with the surge in orders for 'panic buying' in Japan and China ahead of the U.S. tariff imposition.
The manufacturing Purchasing Managers' Index (PMI), which indicates business trends in the manufacturing sector, also showed a downward trend. According to Standard & Poor's (S&P) Global, the PMI for South Korea's manufacturing sector in February was 49.9, a slight drop from the previous month (50.3). A PMI index below 50 indicates an overall decrease compared to the previous month.
The Federation of Korean Industries recently noted that our country's leading industry, manufacturing, is facing "an unprecedented crisis," urging the government to implement extraordinary measures, including industrial support at competitive levels and tax incentives to promote domestic production.