Current Economic Situation, May 2019

 

Industrial Activities Improve and Consumer Prices Stay Stable

 

 

Industrial activities improved in March due to a low base effect from the previous month.  Employment continued to grow in April, although unemployment went up, and consumer prices stayed stable. 

 

Industrial production rose in March (up 1.1%, m-o-m) as mining and manufacturing (up 1.4%, m-o-m), service output (down 0.2%, m-o-m) and construction completed (up 8.9%, m-o-m) all improved.

 

Consumption and investment increased in March:  Retail sales rose (down 0.5% → up 3.3%, m-o-m) as well as facility investment (down 10.2% →up 10.0%, m-o-m) and construction completed (down 6.5% → up 8.9%, m-o-m). 

 

Exports declined 2.0 percent year-on-year in April, falling for a fifth consecutive month, due to weak global demand as well as low semiconductor prices.

 

The April consumer sentiment index (CSI) improved 1.8 points to 101.6, a fifth increase in a row, and the business sentiment index (BSI) improved 2 points to 75, the outlook for May climbing 1 point to 77. 

 

The cyclical indicator of the coincident composite index fell 0.1 points in March, as well as the cyclical indicator of the leading composite index, to 98.5 and 98.2, respectively.

 

The economy added 170,000 jobs year-on-year in April:  Service jobs continued to increase and a decline in manufacturing jobs slowed.  The unemployment rate rose 0.3 percentage points to 4.4 percent compared with a year ago.

 

Consumer prices in April rose 0.6 percent year-on-year as service prices stayed stable, as well as oil product prices.

 

In April KOSPI went down in the latter half of the month and the won continued to weaken.  Treasury bond yields fluctuated.

 

Housing prices continued to decline in April (down 0.21%, m-o-m), along with Jeonse (lump-sum deposits with no monthly payments) prices (down 0.29%, m-o-m).  Housing transactions fell.

 

The economy over the first quarter of this year had to deal with a slowdown in major indicators as mining and manufacturing, facility investment and exports all declined amid a faster-than-expected global economic slowdown and weak semiconductor markets.

 

There are uncertainties arising from Brexit in addition to US-China trade tensions, which may lead to increased volatility in the international financial market, as well as a further slowdown in the global economy.

 

The government will strengthen its risk management and get ready for the spending of the supplementary budget as soon as approved by the National Assembly, and will continue to work to successfully implement the measures drawn up to promote investment, encourage exporters and improve regulations.  

 

 

Key Statistics

 

Employment

 

	2016	2017			2018						2019
		Annual	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Apr	Q1	Mar	Apr
Number of employed (million)	26.41	26.73	27.00	26.88	26.82	26.28	27.02	27.02	26.97	26.87	26.46	26.81	27.04
Employment rate (%)	60.6	60.8	61.4	61.0	60.7	59.6	61.2	61.1	60.9	60.9	59.6	60.4	60.8
(Seasonally adjusted)	60.6	60.8	60.8	60.9	60.7	60.9	60.7	60.5	60.7	60.7	60.9	61.0	60.7

 

 

 

Consumer Price Index

 

	2018									2019
	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr
y-o-y	1.5	1.5	1.5	1.1	1.4	2.1	2.0	2.0	1.3	0.8	0.5	0.4	0.6
m-o-m	0.2	0.0	-0.2	-0.2	0.9	0.8	-0.2	-0.7	-0.3	-0.1	0.4	-0.2	0.4

 

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2			2018				2019
			Annual	Q1	Q4	Mar	Q1¹	Jan	Feb¹	Mar¹
Mining		(q-o-q, m-o-m)	-	-0.4	-1.5	-1.1	-2.9	0.2	-3.4	1.4
		(y-o-y)	1.3	-1.1	4.3	-2.5	-2.1	-0.2	-3.4	-2.8
Manufacturing	Production	(q-o-q, m-o-m)	-	-0.4	-1.4	-0.9	-3.1	0.3	-3.4	1.5
		(y-o-y)	1.2	-1.4	4.6	-2.8	-2.1	0.0	-3.5	-2.9
	Inventory³		8.0	1.9	5.7	0.8	-1.6	-1.7	0.7	-0.6
	Shipments		-0.2	-1.1	-1.5	-0.7	-2.0	1.0	-2.6	2.5
	Average operation ratio		73.5	72.8	73.1	72.1	71.9	73.6	70.5	71.5
	Production capacity (y-o-y)		-0.2	-0.2	-0.3	-0.5	-0.7	-0.6	-1.0	-0.5

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	Q1¹	Jan	Feb¹	Mar¹
Service activity index	2.6	1.9	1.1	0.0	2.1	0.9	0.4	0.3	0.4	0.1	1.3	-1.6	0.2

1. Preliminary

 

 

Retail Sales

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

	2016	2017	2018					2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1¹	Jan	Feb¹	Mar¹
Retail sales	3.9	1.9	4.3	2.1	0.6	-0.2	-0.1	1.3	0.3	-0.5	3.3
(y-o-y)	-	-	-	5.3	5.0	3.8	3.0	1.7	4.3	-1.8	2.4

1. Preliminary

 

 

Facility Investment Index

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

	2016	2017	2018					2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Jan	Feb¹	Mar¹
Facility investment index	-1.3	14.1	-3.8	7.1	-7.6	-7.7	0.0	-5.4	1.9	-10.2	10.0
y-o-y	-	-	-	10.2	-4.8	-13.5	-6.0	-19.5	-17.0	-26.8	-15.5

1. Preliminary

 

 

Construction Completed

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

	2016	2017	2018					2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1¹	Jan	Feb¹	Mar¹
Construction completed (constant)	15.4	10.5	-5.3	0.8	-4.1	-3.8	-3.7	3.0	3.5	-6.5	8.9
y-o-y	-	-	-	0.8	-3.5	-9.7	-7.9	-8.3	-10.7	-12.2	-2.9

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2018					2019
	Aug	Sep	Oct	Nov	Dec	Jan¹	Feb¹	Mar¹
Cyclical indicator of coincident composite index	99.9	99.7	99.6	99.3	99.2	99.1	98.6	98.5
(m-o-m, points)	-0.2	-0.2	-0.1	-0.3	-0.1	-0.1	-0.5	-0.1
Cyclical indicator of leading composite index	99.9	99.6	99.3	99.1	98.9	98.6	98.3	98.2
(m-o-m, points)	-0.4	-0.3	-0.3	-0.2	-0.2	-0.3	-0.3	-0.1

1. Preliminary

 

Exports and Imports

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

	2016	2017	2018						2019
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Apr	Q1	Mar	Apr¹
Exports	495.43	573.69	604.86	145.05	151.62	153.64	154.55	49.85	132.73	47.10	48.86
(y-o-y)	-5.9	15.8	5.4	9.8	3.1	1.7	7.7	-2.0	-8.5	-8.2	-2.0
Average daily exports	1.81	2.13	2.24	2.16	2.30	2.28	2.22	2.17	2.03	2.09	20.4
Imports	406.19	478.48	535.20	132.43	133.15	130.31	139.31	43.69	123.40	41.89	44.74
(y-o-y)	-6.9	17.8	11.9	13.7	13.0	7.8	12.9	15.1	-6.8	-6.7	2.4
Average daily imports	1.49	1.78	1.98	1.98	2.02	1.93	2.00	1.90	1.88	1.86	1.87

1. Preliminary

 

Please refer to the attached PDF.