In January, production turned negative as output fell in key industries such as semiconductors and shipbuilding. Meanwhile, consumer spending and investment indicators increased.
According to the "Industrial activity trends for January 2026" released by the Ministry of Data and Statistics (MODS) on the 4th, last month's total industry production (seasonally adjusted, excluding agriculture, forestry and fishing) fell 1.3% from the previous month. It returned to a decline just one month after a 1.0% increase in Dec. last year.
Mining and manufacturing output fell 1.9% from the previous month. Electronic components (6.5%) and automobiles (2.0%) increased, but semiconductors (-4.4%) and other transport equipment (-17.8%) saw sharp declines. The average operating rate in manufacturing was 71.2%, down 1.4 percentage points (p) from the previous month.
Lee Du-won, director of economic trend statistics review at the Ministry of Data and Statistics (MODS), said, "In the case of semiconductors, export value, which is based on amounts, increased due to a sharp surge in prices for products such as DRAM, but volume decreased," and noted, "There was also an effect from a base due to shipbuilding, as construction volume jumped significantly in Dec. last year."
Service output was flat (0.0%) from the previous month. Information and communications (8.0%) and finance and insurance (1.1%) increased, but wholesale and retail (-1.4%) and professional, scientific and technical (-3.0%) were sluggish.
Consumer spending turned to an increase. Retail sales rose 2.3% from the previous month as sales of semi-durables such as clothing (6.0%), durables such as communication devices and computers (2.3%), and nondurables such as cosmetics (0.9%) all increased.
Investment also improved. Facility investment rose 6.8% from the previous month as investment increased in transport equipment such as automobiles (15.1%) and machinery such as semiconductor manufacturing equipment (4.0%). In contrast, construction completed (constant prices) fell 11.3% from the previous month as building construction performance dropped 15.0%. It was the largest decline in 14 years since a 13.6% drop in Jan. 2012.
Business cycle indicators showed stagnation in coincident data and improvement in leading data. The cyclical component of the coincident composite index, which reflects current conditions, was flat at 99.0, the same as the previous month, while the cyclical component of the leading composite index, which signals future conditions, rose 0.7 points to 102.3.