Last month, total industrial production increased by 1.2% compared to the previous month, driven by growth in both the manufacturing and service industries. Retail sales rose by 0.5% compared to the previous month, boosted by increases in clothing and cosmetics sales. Production turned positive after three months, while consumption increased after four months.
Investment in facilities decreased by 3.7% compared to the previous month due to a decline in investment in transport equipment, while construction starts rose by 6.7% compared to the previous month, driven by increased construction performance in building. After three consecutive months of decline, construction starts turned positive for the first time in four months.
According to the 'June Industrial Activity Trends' released by the Statistics Korea on the 31st, the total industrial production index (seasonally adjusted) was 113.8, an increase of 1.2% from the previous month.
Production increased in the mining and quarrying, construction, services, and public administration sectors. The mining and manufacturing industries rose by 1.6% as production increased in both mining and manufacturing, as well as electricity and gas industries. Manufacturing production was boosted by increased production in semiconductors and automobiles, despite a decrease in electronic components and machinery, resulting in a 1.7% increase compared to the previous month.
Last month, semiconductor production increased by 6.6% compared to the previous month and was up 16.6% compared to the same month last year. Automobile production increased by 4.2% compared to the previous month and 1.8% compared to the same month last year.
Manufacturing shipments rose by 1.8% compared to the previous month, with domestic shipments (2.0%) and export shipments (1.5%) both increasing. The inventory/shipment ratio fell to 102.6%, down 1.6 percentage points from the previous month. The average manufacturing capacity utilization rate was recorded at 72.4%, up 1.0 percentage points from the previous month.
While domestic automobile shipments increased, exports fell. Observers noted that a decrease in export shipments was due to the imposition of tariffs on automobiles in the United States.
The inventory/shipment ratio in manufacturing was 102.6%, a decrease of 1.6 percentage points compared to the previous month. A quarterly analysis of the manufacturing inventory and shipment cycle showed that the decrease in shipments widened, while the rate of decline in inventory lessened.
Retail sales increased by 0.5% compared to the previous month, despite a decline in sales of durable goods such as passenger cars (-1.6%), while semi-durable goods like clothing (4.1%) and non-durable goods such as cosmetics (0.3%) saw sales increases.
By business type, sales increased in department stores (3.4%), large supermarkets (2.2%), duty-free shops (7.5%), specialty retailers (1.1%), and non-store retail (1.6%), while sales decreased in supermarkets and convenience stores (-2.7%, -0.9%) and passenger car and fuel retailers (-2.6%).
Director Choi Chang-yoon of the Statistics Korea service industry trends noted, "Retail sales had been declining until last month, but they increased significantly for the first time in four months," adding, "It appears that consumer sentiment has been gradually reviving this month compared to last month." Director Choi stated, "We need to keep an eye on future consumption coupons and policy directions, but it is positive from the perspective of turning to growth."
Investment in facilities decreased by 3.7% compared to the previous month, with increases in investment in machinery such as semiconductor manufacturing equipment, but a decline in investment in other transport equipment (-14.8%).
Investment in facilities continued its downward trend for four consecutive months. In this regard, Cho Seong-jung, Director of Economic Analysis at the Ministry of Economy and Finance, said, "It seems that the risks from tariffs under Trump are reflected in the difficulties corporations face in actively pursuing investments."
Construction starts rose by 6.7% compared to the previous month, bolstered by an increase in construction performance in building (+10.3%), although performance decreased in civil engineering. However, there was a 12.3% decline compared to the same month last year, indicating a downturn in the construction market.
Director Choi stated, "Construction starts rebounded after declining for three consecutive months. The reduction compared to the same month last year is also narrowing, but it is too early to determine that the construction market has reached a turning point."
The coincident composite index, which reflects the current economic situation, fell by 0.1 points compared to the previous month.
The leading composite index, which forecasts future economic trends, increased by 0.2 points compared to the previous month.