Current Economic Situation, march 2019

 

Industrial Activities and Economic Confidence Improve,

Employment Increasing

 

 

The economy has been improving in 2019 as industrial activities rose in January and economic confidence continued to rise in February.  Jobs grew significantly in February compared with the previous month, and consumer prices remained stable.

 

Industrial production rose in January by 0.8 percent month-on-month due to strong mining and manufacturing (up 1.2%, m-o-m), service output (up 0.9%, m-o-m) and construction completed (up2.1%, m-o-m).   

 

Consumption and investment improved in January:  Retail sales rose (down 0.2% → up 0.2%, m-o-m) as well as facility investment (down 2.6% → up 2.2%, m-o-m) and construction completed (up 2.4% → up 2.1%, m-o-m). 

 

Exports remained weak in February, falling 11.1 percent year-on-year due to weak semiconductors and slowing down global economies, including the Chinese economy.

 

The consumer sentiment index (CSI) rose for the third consecutive month in February, up 2 points to 99.5, and the business sentiment index (BSI) improved 2 points to 69.  The BSI outlook for March jumped 11 points to 76. 

 

The cyclical indicator of the coincident composite index fell in January, as well as the cyclical indicator of the leading composite index, by 0.1points and 0.4points, respectively, compared to a month ago.

 

The economy added 263,000 jobs in February as service jobs increased and also due to the government’s job creation programs.  The unemployment rate went up by 0.1 percentage points due to increased job seekers.

 

Consumer prices in February rose 0.5 percent compared to a year ago, fresh food prices being stable and oil prices continuing to fall.

 

In February, KOSPI declined and the won weakened.  Treasury bond yields fluctuated.

 

Housing prices continued to decline in February (down 0.15% → down 0.12%, m-o-m) and Jeonse (lump-sum deposits with no monthly payments) prices continued to fall (down 0.22% → down 0.22%, m-o-m).

 

There has been a positive momentum into this year backed by improving industrial activities and economic confidence.  However, uncertainties linger amid concerns over global economic slowdown, weak semiconductor markets, US-China trade relationship and Brexit.

 

The government will strengthen its risk management, and will try to find ways to boost the economy and promote inclusiveness.  The government will work to successfully implement measures to encourage exporters and ventures, as well as plans to support industrial innovation.
 

 

 

Key Statistics

 

 

Employment

 

	2016	2017			2018						2019
		Annual	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Feb	Jan	Feb
Number of employed (million)	26.41	26.73	27.00	26.88	26.82	26.28	27.02	27.02	26.97	26.08	26.23	26.35
Employment rate (%)	60.6	60.8	61.4	61.0	60.7	59.6	61.2	61.1	60.9	59.2	59.2	59.4
(Seasonally adjusted)	60.6	60.8	60.8	60.9	60.7	60.9	60.7	60.5	60.7	61.7	60.7	61.0

 

 

Consumer Price Index

 

	2018											2019
	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb
y-o-y	1.3	1.2	1.5	1.5	1.5	1.1	1.4	2.1	2.0	2.0	1.3	0.8	0.5
m-o-m	0.8	-0.1	0.2	0.0	-0.2	-0.2	0.9	0.8	-0.2	-0.7	-0.3	-0.1	0.4

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2			2017			2018				2019
			Annual	Q4	Dec	Annual¹	Q3	Q4¹	Dec¹	Jan¹
Mining		(q-o-q, m-o-m)	-	-1.0	-2.0	-	0.6	-1.5	-0.8	0.5
		(y-o-y)	1.9	-3.8	-4.8	1.3	-1.8	4.3	0.7	0.1
Manufacturing	Production	(q-o-q, m-o-m)	-	-1.1	-2.5	-	0.3	-1.4	-0.9	0.5
		(y-o-y)	1.6	-4.8	-6.2	1.2	-2.3	4.6	1.2	0.2
	Inventory³		8.8	2.9	1.2	7.3	-2.6	4.8	1.4	-1.2
	Shipments		0.7	0.4	-3.8	-0.2	0.9	-1.5	-1.6	1.5
	Average operation ratio		73.3	71.8	70.3	73.5	74,2	73.1	72.2	73.1
	Production capacity (y-o-y)		1.2	-0.1	-0.5	-0.2	-1.5	-0.3	-0.1	0.6

1. Preliminary

2. Including mining, manufacturing, electricity and gas industry

3. End-period

 

Service Output

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

	2016	2017			2018						2019
	Annual	Annual	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Dec¹	Jan¹
Service activity index	2.6	1.9	1.1	0.0	2.1	0.9	0.4	0.3	0.4	-0.1	0.9

1. Preliminary

 

 

Retail Sales

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

	2016	2017			2018
	Annual	Annual	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹	Jan¹
Retail sales	3.9	1.9	0.6	1.6	4.2	2.1	0.6	-0.2	-0.1	0.8	-0.2	0.2
(y-o-y)	-	-	3.0	3.0	-	5.4	5.0	4.2	2.5	1.0	3.0	4.0

1. Preliminary

 

 

Facility Investment Index

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

	2016	2017			2018
	Annual	Annual	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Dec¹	Jan¹
Facility investment index	-1.3	14.1	0.2	-1.7	-3.7	8.4	-11.0	-6.2	0.1	-2.6	2.2
y-o-y	-	-	20.6	2.0	-	9.4	-5.9	-13.6	-8.6	-14.9	-16.6

1. Preliminary

 

 

Construction Completed

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

	2016	2017			2018
	Annual	Annual	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Dec¹	Jan¹
Construction completed (constant)	15.4	10.5	-0.3	-0.1	-5.2	2.5	-4.9	-4.4	-7.8	2.4	2.1
y-o-y	-	-	12.7	-0.5	-	0.8	-3.5	-9.7	-3.7	-9.1	-11.8

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2018							2019
	Jun	Jul	Aug	Sep	Oct	Nov¹	Dec¹	Jan¹
Cyclical indicator of coincident composite index	100.3	100.0	99.9	99.7	99.6	99.3	99.2	99.1
(m-o-m, points)	-0.1	-0.2	-0.2	-0.2	-0.1	-0.3	-0.1	-0.1
Cyclical indicator of leading composite index	100.4	100.3	99.9	99.6	99.3	99.1	98.9	98.5
(m-o-m, points)	-0.1	-0.1	-0.4	-0.3	-0.3	-0.2	-0.2	-0.4

1. Preliminary

 

 

Exports and Imports

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

	2016	2017	2018							2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Dec	Feb	Jan	Feb¹
Exports	495.43	573.69	604.86	145.05	151.62	153.64	154.55	48.21	44.52	46.33	39.56
(y-o-y)	-5.9	15.8	5.4	9.8	3.1	1.7	7.7	-1.7	3.1	-5.9	-11.1
Average daily exports	1.81	2.13	2.24	2.16	2.30	2.28	2.22	2.14	2.28	1.93	2.08
Imports	406.19	478.48	535.20	132.43	133.15	130.31	139.31	44.03	41.72	45.03	36.47
(y-o-y)	-6.9	17.8	11.9	13.7	13.0	7.8	12.9	1.1	15.2	-1.7	-12.6
Average daily imports	1.49	1.78	1.98	1.98	2.02	1.93	2.00	1.96	2.14	1.88	1.92

1. Preliminary

 

Please refer to the attached PDF.