Current Economic Situation, April 2019

 

Industrial Activities Slow Down,

Employment Improving and Consumer Prices Stable

 

 

Industrial activities slowed down due to fewer days worked in February.  Employment continued to grow significantly in March and consumer prices remained stable.

 

Industrial production fell in February (down 1.9%, m-o-m) as mining and manufacturing (down 2.6%, m-o-m), service output (down 1.1%, m-o-m) and construction completed (down 4.6%, m-o-m) all declined.

 

Consumption and investment slowed in February:  Retail sales fell (up 0.1% → down 0.5%, m-o-m) as well as facility investment (up 1.9% → down 10.4%, m-o-m) and construction completed (up 3.3% → down 4.6%, m-o-m). 

 

Exports remained weak in March, falling 8.2 percent year-on-year amid global economies slowing down, as well as due to weak semiconductors.

 

The consumer sentiment index (CSI) improved for the fourth consecutive month in March, up 0.3 points to 99.8, and the business sentiment index (BSI) improved 4 points to 73.  The BSI outlook remained unchanged for April at 76. 

 

The cyclical indicator of the coincident composite index fell 0.4 points in February to 98.7, and the cyclical indicator of the leading composite index declined 0.3points to 98.3.

 

The economy added 250,000 jobs in March backed by an increase in service jobs and government’s employment programs.  Manufacturing jobs continued to decline but at a slower pace.  The unemployment rate fell 0.2 percentage points to 4.3 percent compared with a year ago.

 

Consumer prices in March rose 0.4 percent compared to a year ago, fresh food and oil prices being stable and personal service prices growing at a slow pace.

 

In March, KOSPI declined and the won weakened.  Treasury bond yields fell.

 

Housing prices continued to decline in March (down 0.12% → down 0.16%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (down 0.22% → down 0.25%, m-o-m).  Housing transactions fell.

 

The economy has to deal with the global economic slowdown and weak semiconductor markets, and uncertainties linger amid US-China trade conflicts and Brexit.

 

In seasonally adjusted terms which exclude the Lunar New Year Holiday effect, service output continued to improve for the January-February period, while other major indicators fell, including mining and manufacturing production, facility investment and exports.

 

The government will fast draw up supplementary budgets, and will strengthen its risk management.  The government will work to successfully implement the measures announced to promote investment and ventures, encourage exporters and improve regulations.

 

 

 

Key Statistics

 

 

Employment

 

	2016	2017			2018						2019
		Annual	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Mar	Feb	Mar
Number of employed (million)	26.41	26.73	27.00	26.88	26.82	26.28	27.02	27.02	26.97	26.56	26.35	26.81
Employment rate (%)	60.6	60.8	61.4	61.0	60.7	59.6	61.2	61.1	60.9	60.2	59.4	60.4
(Seasonally adjusted)	60.6	60.8	60.8	60.9	60.7	60.9	60.7	60.5	60.7	60.9	61.0	61.0

 

 

Consumer Price Index

 

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

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2			2017			2018				2019
			Annual	Feb	Q4	Annual¹	Feb	Q3	Q4	Jan¹	Feb¹
Mining		(q-o-q, m-o-m)	-	-2.8	-0.1	-	0.5	0.8	-1.5	0.2	-2.6
		(y-o-y)	2.4	8.9	-2.7	1.3	-5.7	0.1	4.3	-0.2	-2.7
Manufacturing	Production	(q-o-q, m-o-m)	-	-3.3	0.1	-	0.5	0.6	-1.4	0.3	-2.6
		(y-o-y)	2.2	9.3	-3.5	1.2	-6.1	-0.1	4.6	0.0	-2.5
	Inventory³		8.8	0.4	2.9	7.3	1.0	-1.2	5.7	-1.6	0.5
	Shipments		0.7	-1.8	0.4	-0.2	-0.2	0.9	-1.5	1.1	-2.1
	Average operation ratio		73.3	72.8	72.8	73.5	73.5	74.2	73.1	73.3	71.2
	Production capacity (y-o-y)		1.2	1.7	0.8	-0.2	0.1	-0.2	-0.3	-0.3	-0.7

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	Annual	Q1	Q2	Q3	Q4	Dec	Jan¹	Feb¹
Service activity index	2.6	1.9	1.1	0.0	2.1	0.9	0.4	0.3	0.4	-0.1	1.1	-1.1

1. Preliminary

 

 

Retail Sales

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

	2016	2017			2018						2019
	Annual	Annual	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4	Dec	Jan¹	Feb¹
Retail sales	3.9	1.9	0.6	1.6	4.3	2.1	0.6	-0.2	-0.1	-0.2	0.1	-0.5
(y-o-y)	-	-	3.0	3.0	-	5.4	5.0	4.2	2.5	3.1	4.1	-2.0

1. Preliminary

 

 

Facility Investment Index

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

	2016	2017			2018						2019
	Annual	Annual	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Dec	Jan¹	Feb¹
Facility investment index	-1.3	14.1	0.2	-1.7	-3.8	7.1	-7.6	-7.7	0.0	-2.8	1.9	-10.4
y-o-y	-	-	20.6	2.0	-	10.2	-4.8	-13.5	-6.0	-15.1	-17.0	-26.9

1. Preliminary

 

 

Construction Completed

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

	2016	2017			2018						2019
	Annual	Annual	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Dec	Jan¹	Feb¹
Construction completed (constant)	15.4	10.5	0.1	0.1	-5.3	0.8	-4.1	-3.8	-3.7	2.2	3.3	-4.6
y-o-y	-	-	12.9	0.1	-	0.8	-3.5	-9.7	-7.9	-9.3	-10.9	-10.6

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2018						2019
	Jul	Aug	Sep	Oct	Nov	Dec¹	Jan¹	Feb¹
Cyclical indicator of coincident composite index	100.0	99.9	99.7	99.6	99.3	99.2	99.1	98.7
(m-o-m, points)	-0.2	-0.2	-0.2	-0.1	-0.3	-0.1	-0.1	-0.4
Cyclical indicator of leading composite index	100.3	99.9	99.6	99.3	99.1	98.9	98.6	98.3
(m-o-m, points)	-0.1	-0.4	-0.3	-0.3	-0.2	-0.2	-0.3	-0.3

1. Preliminary

 

 

Exports and Imports

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

	2016	2017	2018						2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Mar	Feb	Mar¹
Exports	495.43	573.69	604.86	145.05	151.62	153.64	154.55	51.31	39.44	47.11
(y-o-y)	-5.9	15.8	5.4	9.8	3.1	1.7	7.7	5.5	-11.4	-8.2
Average daily exports	1.81	2.13	2.24	2.16	2.30	2.28	2.22	2.18	2.08	2.09
Imports	406.19	478.48	535.20	132.43	133.15	130.31	139.31	44.90	36.47	41.89
(y-o-y)	-6.9	17.8	11.9	13.7	13.0	7.8	12.9	5.4	-12.6	-6.7
Average daily imports	1.49	1.78	1.98	1.98	2.02	1.93	2.00	1.91	1.92	1.86

1. Preliminary

 

Please refer to the attached PDF.