Industrial production in July stayed at the same level as the previous month, while consumption turned downward. Manufacturing output rose slightly, but service output fell sharply. In contrast, facility investment expanded its increase for the second straight month as investment in transport equipment such as ships and aircraft grew.
According to the "Industrial activity trends in July 2026" released by the Ministry of Data and Statistics (MODS) on the 31st, last month's all-industry production index (seasonally adjusted, excluding agriculture, forestry and fishery) was 120.2 (2020=100), unchanged from the previous month. After two straight months of declines in April (-0.5%) and May (-0.4%), it rose 2.4% in June, but the increase stopped after one month.
Mining and manufacturing output rose 0.2% from the previous month. Within mining and manufacturing, manufacturing output also increased 0.2%. Production grew in electronic components (20.7%), basic metals (4.2%), and pharmaceuticals (4.7%), but fell in automobiles (-4.5%), other transport equipment (-5.0%), and electrical equipment (-2.8%). A Ministry of Data and Statistics (MODS) official said, "Although factors such as partial strikes had an effect, automobile production fell sharply due to a base effect after a large increase last month."
The average operating rate in manufacturing was 74.9%, up 0.2 percentage point from the previous month. Manufacturing inventories increased 2.1% from the previous month.
Service output fell 1.3% from the previous month. This was the biggest drop in 4 years and 5 months since February 2022 (-1.7%). Production increased in information and communications (3.5%) and health and social welfare (0.7%), but decreased in finance and insurance (-4.8%), professional, scientific and technical (-2.7%), and wholesale and retail (-1.1%). Finance and insurance shifted from a 4.2% increase in June to a 4.8% decrease in July. A Ministry of Data and Statistics (MODS) official said, "As stock trading volume and transaction value fell in July, the finance and insurance sector, which had been on an uptrend, declined, leading to a decrease in service output."
Consumption fell 2.4% from the previous month. After a 0.1% decline in May and a 2.7% increase in June, it turned downward after two months. Sales of durable goods such as passenger cars and home appliances fell 7.7%, and sales of semi-durable goods such as clothing and cosmetics and of nondurable goods also fell 1.4% and 0.1%, respectively. A Ministry of Data and Statistics (MODS) official explained, "The base effect from a sharp rise in passenger car sales in June due to improved parts supply and demand ahead of the end of the special consumption tax cut, and the end of Samsung Electronics' rebate event for home appliances and communication devices, affected the decline in consumption."
Facility investment rose 7.5% from the previous month. After a 6.9% increase in June, it rose for the second straight month and marked the biggest gain since February (15%). Investment in machinery, including equipment for semiconductor manufacturing, increased 4.2%, and investment in transport equipment, led by other transport equipment, rose 15.4%. A Ministry of Data and Statistics (MODS) official said, "Investment in equipment for semiconductor manufacturing increased as memory semiconductor production capacity expanded, and ship investment also increased due to higher profitability from ocean freight rates amid the Middle East war."
Construction completed fell 1.1% from the previous month. After a 4.2% increase in June, it turned downward after two months. Civil engineering performance rose 18.5%, but building construction performance fell 7.4%.
Business cycle indicators improved. The coincident composite index of cyclical indicators (101.2), which reflects current economic conditions, rose 0.8 point from the previous month, and the leading composite index of cyclical indicators (104.2), which signals the future economic phase, rose 0.4 point.