With last year's industrial production growth rate falling below the 1% range for the first time in five years, results split sharply by sector and by the size of corporations.
Except for semiconductors and a few export-driven mainstay industries, manufacturing output actually fell, and while large corporations focused on exports performed well, small and midsize corporations and domestic demand–based industries could not escape sluggishness.
According to the Ministry of Data and Statistics (MODS) on the 1st, last year's all-industry production index (excluding agriculture, forestry and fisheries; preliminary) growth rate was 0.5%, the lowest in five years since 2020 (-1.1%), when COVID-19 depressed the broader economy.
In particular, last year's manufacturing production index by corporation size (by revenue; 2020=100) showed small and midsize corporations at 98.3, down 3.3% from a year earlier. The decline in production among small and midsize corporations was the largest since the related statistics began in 2015, and the index level was also the lowest. Production at small and midsize corporations fell in 2022 and 2023, rebounded briefly in 2024, and then turned negative again last year.
The gap with large corporations widened further. Production by large corporations rose 3.0% last year, climbing for the second straight year, and the production index hit a record high of 118.8 since the statistics began. The warmth in industrial production was effectively concentrated in large corporations.
Disparities were also stark by industry. Production in semiconductor and electronic components manufacturing rose 10.2% last year, leading overall manufacturing gains. But excluding this sector, manufacturing output turns to a decline.
While the overall manufacturing production index rose 1.7%, subtracting semiconductors yields a 0.3% drop. The same pattern holds even when broadening the scope to all mining and manufacturing.
Shipbuilding played a similar role. Excluding ship and boat building, the manufacturing production growth rate is even lower, underscoring that the industrial rebound is relying on a few sectors.
Weak domestic demand was also evident. Looking at last year's mining and manufacturing shipments, exports rose 3.7% while domestic shipments fell 2.6%. Even for manufacturing alone, the drop in domestic shipments (-2.9%) was the largest in the past five years. Across several subsectors, the pattern of shrinking domestic demand and rising exports repeated.
Inside and outside the government, there is concern that the strength of mainstay industries such as semiconductors could create an illusion that masks broader industrial difficulties. There are also worries that the heavier the reliance on specific industries and exports, the more vulnerable the economy may become to cyclical swings.