Despite the "Middle East war," industrial production, consumption, and facility investment all rose in March. It is the first time in six months that the three indicators increased simultaneously since September last year.
According to the "Industrial activity trends for March 2026" that the Ministry of Data and Statistics (MODS) released on the 30th, total industrial production (seasonally adjusted, excluding agriculture, forestry and fisheries) increased 0.3% from the previous month. After falling in January (-0.8%) and rising in February (2.1%), it extended gains for a second month.
Mining and manufacturing output rose 0.3% from the previous month. Within mining and manufacturing, manufacturing output increased 0.3%. In manufacturing, automobiles (7.8%) and other transportation equipment (12.3%) led the strength.
Semiconductors, however, fell 8.1% from the previous month. This was a base effect after the sector posted its best performance in 38 years in February, and the business upturn is still seen as continuing. Compared with a year earlier, semiconductors rose 9.9%.
Some industries appear to have been hit by the negative fallout of the "Middle East war." Notably, petroleum refining output fell 6.3%. Inventories rose 11.8%. Lee Du-won, Deputy Director General for economic trend statistics at the Ministry of Data and Statistics (MODS), said, "In addition to the impact of the war, regular facility maintenance typically conducted in March to April affected production, leading to a decline," adding, "Government export restrictions appear to have boosted inventories." Chemical industry output also fell 0.3%.
Service output increased 1.4%. Gains in finance and insurance (4.6%) on the back of a strong stock market contributed. Transportation and warehousing (3.9%) also showed strength, reflecting higher ocean freight rates and increased export volumes.
Consumption rose 1.8% from the previous month. Durable goods jumped 9.8%, led by telecommunications devices and computers (30.1%). The rise is attributed to the launch of new smartphone models and increased demand for personal computers (PCs) for the new school term. Durable goods such as shoes and bags increased 0.3%, while nondurable goods such as food and beverages fell 1.3%.
Facility investment rose 1.5% from the previous month. With previously contracted aircraft being delivered, investment in other transportation equipment increased sharply (5.2%). Construction completed work fell 7.3%, seen as a base effect after a 13% rise the previous month.
The coincident composite index of cyclical indicators, which reflects current economic conditions, rose 0.5 point from the previous month. The leading composite index of cyclical indicators, which signals future economic phases, climbed 0.7 point.
The Deputy Director General said, "The full-fledged impact of the Middle East war is expected to begin showing directly from April."
Meanwhile, in the first quarter of this year (January to March), total industrial production increased 1.7% from the previous quarter. It was the largest gain in 17 quarters since the fourth quarter of 2021 (2.7%). Not only industrial production but also consumption (2.4%), facility investment (12.6%), and construction completed work (1.2%) all rose together. It is the first time since the second quarter of 2023 that all these indicators increased.