Current Economic Situation, November 2017

 

Exports and Production Rise while Consumption Rebounds

 

 

The Korean economy has seen rising exports and production amid improving global economies, as well as a rebound in consumption.

 

The economy added 314,000 jobs year-on-year in September, an increase from 212,000 in the previous month when bad weather slowed job growth, backed by supplementary budget implementation.

 

Consumer prices in October rose at a slower rate compared with the previous month (up 2.1%→ up 1.8%, y-o-y) due to stabilizing vegetable prices and an easing base effect in electricity rates from the previous summer.

 

Mining and manufacturing production rose for the third consecutive month in September (up 0.1%→ up 0.1%, m-o-m) due to strong automobiles, vessels and chemical products, and service output rose for the fourth straight month (up 0.1%→ up 1.3%, m-o-m) backed by wholesale & retail.

 

Retail sales rebounded in September (down 0.9%→ up 3.1%, m-o-m) due to strong demand for Chuseok holiday-related items and smartphone sales.

 

Facility investment surged in September (down 0.7%→ up 5.5%, m-o-m) after declining for two straight months as investment in semiconductor manufacturing equipment rose.  Construction investment fell (down 1.7%→ down 2.2%, m-o-m) as housing construction edged down after rising for three months in a row.  Construction investment rose 16.1 percent compared to a year ago.

 

In September, the cyclical indicator of the coincident composite index rose 0.1 points to 100.9, and the cyclical indicator of the leading composite index fell 0.2 points to 101.6.

 

Exports rose for the 12^th straight month in October (up 35.0%→ up 7.1%, y-o-y) backed by strong major export items, such as semiconductors, vessels and petroleum products, despite less days worked.

 

In October, KOSPI increased amid rising global stock markets and expectations for improving economic conditions, and the dollar-won exchange rate fell due to easing geopolitical risks.  Government bond yields rose.

 

Housing prices rose in October (up 0.12%→ up 0.13%, m-o-m) as price growth in the Seoul metropolitan area picked up slightly, and Jeonse (lump-sum deposits with no monthly payments) prices stayed stable compared with the previous month (up 0.06%→ up 0.06%, m-o-m).

 

The economy is expected to stay on a recovery path due to strong exports and supplementary budget implementation.  However, internal and external risks linger, such as monetary policy normalization in major economies, trade issues and North related risks.

 

The government will strengthen its risk management, and will work to ensure that a broader society can benefit from the current economic recovery through decent jobs and a boost in the real economy by implementing supplementary budgets as planned.

 

 

Key Statistics

 

 

Employment

 

	2014	2015	2016						2017
			Annual	Q1	Q2	Q3	Q4	Sep	Q1	Q2	Q3	Aug	Sep
Number of employed (million)	25.60	25.94	26.24	25.55	26.39	26.55	26.45	26.53	25.92	26.75	26.83	26.74	26.84
Employment rate (%)	60.2	60.6	60.4	59.1	60.8	61.1	60.7	61.0	59.4	61.2	61.3	61.1	61.3
(Seasonally adjusted)	60.2	60.3	60.4	60.5	60.1	60.5	60.6	60.5	60.8	60.6	60.6	60.6	60.7

 

 

Consumer Price Index

 

	2016			2017
	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct
y-o-y	1.5	1.5	1.3	2.0	1.9	2.2	1.9	2.0	1.9	2.2	2.6	2.1	1.8
m-o-m	0.1	-0.1	0.1	0.9	0.3	0.0	-0.1	0.1	-0.1	0.2	0.6	0.1	-0.2

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2			2016			2017
			Annual	Q3	Sep	Q2	Q3¹	Jul	Aug¹	Sep¹
Mining		(q-o-q, m-o-m)	-	0.1	0.7	-2.3	1.5	1.6	0.1	0.1
		(y-o-y)	1.0	0.5	-2.0	0.5	3.5	-0.3	2.3	8.4
Manufacturing	Production	(q-o-q, m-o-m)	-	0.1	0.8	-2.5	1.6	1.5	0.3	0.3
		(y-o-y)	1.0	0.6	-2.0	0.4	3.5	-0.4	2.5	8.7
	Shipment -Domestic consumption -Exports		0.6 1.3 -0.1	-0.5 -0.3 -0.8	0.5 1.2 -0.4	-2.0 -2.1 -1.7	1.8 1.2 2.6	0.3 0.5 0.1	0.5 0.8 0.3	-0.2 -0.2 -0.3
	Inventory3		-5.9	-3.2	-0.8	1.9	1.2	0.9	2.2	-1.9
	Average operation ratio		72.6	71.9	71.6	71.5	72.3	73.1	72.0	71.8
	Production capacity (y-o-y)		0.8	1.0	0.8	0.9	1.0	0.7	1.0	1.2

1. 1. Preliminary
2. 2. Including mining, manufacturing, electricity and gas industry
3. 3. End-period

 

 

Service Output

(q-o-q, m-o-m, %)

	2015	2016					2017
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Aug¹	Sep¹
Service activity index	2.9	3.0	0.2	1.1	1.0	-0.3	0.9	0.6	1.4	0.1	1.3

1. 1. Preliminary

 

 

Retail Sales

(q-o-q, m-o-m, %)

	2015	2016					2017
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Aug¹	Sep¹
Retail sales	-	4.3	-0.2	2.0	-1.2	2.1	-0.5	1.2	1.1	-0.9	3.1
(y-o-y)	2.0	-	5.0	5.9	3.5	2.5	1.9	1.7	4.3	0.9	8.3

1. 1. Preliminary

 

 

Facility Investment Index

(q-o-q, m-o-m, %)

	2015	2016					2017
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Aug¹	Sep¹
Facility investment index	6.9	-1.3	-6.5	5.1	-1.9	8.0	5.6	4.4	-0.3	-0.7	5.5
y-o-y	-	-	-7.6	0.6	-4.7	5.9	18.1	17.7	20.7	12.5	25.2

1. 1. Preliminary

 

 

Construction Completed

(q-o-q, m-o-m, %)

	2015	2016					2017
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Aug¹	Sep¹
Construction completed (constant)	5.0	15.4	6.2	2.3	4.2	4.1	5.9	-1.1	0.0	-1.7	-2.2
y-o-y	-	-	13.2	15.8	14.5	17.7	17.9	13.6	12.5	8.3	16.1

1. 1. Preliminary

 

 

Composite Index of Coincident and Leading Indicators

 

	2017
	Feb	Mar	Apr	May	Jun	Jul¹	Aug¹	Sep¹
Cyclical indicator of coincident composite index	100.7	101.0	101.0	100.8	100.7	100.7	100.8	100.9
(m-o-m, %)	0.0	0.3	0.0	-0.2	-0.1	0.0	0.1	0.1
Cyclical indicator of leading composite index	100.9	100.8	101.0	101.2	101.6	101.7	101.8	101.6
(m-o-m, %)	0.2	-0.1	0.2	0.2	0.4	0.1	0.1	-0.2

1. 1. Preliminary

 

 

Exports and Imports

(US$ billion, y-o-y, %)

	2015	2016						2017
	Annual	Annual	Q1	Q2	Q3	Q4	Sep	Q1	Q2	Q3	Sep	Oct¹
Exports	526.76	495.43	115.19	126.02	121.85	132.36	40.85	132.10	147.20	151.04	55.13	44.98
(y-o-y)	-8.0	-5.9	-13.7	-6.7	-5.0	1.8	-6.0	14.7	16.8	24.0	35.0	7.4
Average daily exports	1.93	1.81	1.73	1.88	1.78	1.86	1.95	1.96	2.21	2.13	2.35	2.50
Imports	436.50	406.19	93.83	99.30	102.46	110.59	33.99	116.25	117.34	120.71	41.67	37.65
(y-o-y)	-16.9	-6.9	-16.0	-10.1	-5.1	4.1	-1.6	23.9	18.2	17.8	22.6	22.6
Average daily imports	1.60	1.49	1.41	1.48	1.50	1.56	1.62	1.72	1.76	1.70	1.77	2.09

1. Preliminary

 

Please refer to the attached PDF