Industrial production in February rebounded sharply on the back of strong semiconductors. Consumption was flat, while both facility and construction investment increased.
According to the Industrial Activity Trends for February 2026 that the Ministry of Data and Statistics (MODS) released on the 31st, overall industry production (seasonally adjusted, excluding agriculture, forestry and fisheries) rose 2.5% from the previous month. It turned to growth in a month from a 0.9% decline in January, the largest increase in 5 years and 8 months since June 2020 (2.9%).
Mining and manufacturing output rose 5.4% from the previous month, driven by semiconductors (28.2%) and nonmetallic mineral products (15.3%). In particular, the growth rate for semiconductors was the highest in 38 years and 1 month since January 1988 (36.8%). In contrast, electronic components (-7.0%) and automobiles (-1.4%) declined.
Excluding semiconductors, manufacturing production also increased 1.0% from the previous month. The average capacity utilization rate in manufacturing was 74.4%, up 3.6 percentage points (p) from the previous month.
Service output increased 0.5%, led by wholesale and retail (2.7%) and professional, scientific and technical services (3.3%). However, some sectors, including information and communications (-5.7%), were sluggish.
Consumption was flat. Retail sales were unchanged overall from the previous month, as sales of semi-durable goods such as clothing (-5.4%) and durable goods such as communication devices and computers (-1.5%) fell, while nondurable goods such as food and beverages (2.6%) increased.
Lee Du-won, director of economic trend statistics deliberation at the Ministry of Data and Statistics (MODS), said, "There were intensive discount events in February due to the government's consumption-boosting policy, and the holiday was long, so food and beverages increased 5.8%," and noted, "We see that demand for dining out shifted to home-cooked meals."
Investment improved significantly. Facility investment increased 13.5% from the previous month as investment rose in both transport equipment such as automobiles (40.4%) and machinery (3.8%). It was the largest increase in 11 years and 3 months since November 2014 (14.1%). Construction completed also rose 19.5% as performance improved in building (17.1%) and civil engineering (25.7%).
Business cycle indicators improved. The coincident composite index cyclical component, which shows current conditions, rose 0.8 points to 99.8. The leading composite index cyclical component, which signals future conditions, was also up 0.6 points to 102.8.