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PRESS RELEASES

Current Economic Situation, July 2019

  • DivisionEconomic Policy Bureau - Economic Analysis Division
  • DateJuly 12, 2019
  • Tel0442152730

Current Economic Situation, July 2019

 

Consumption and Services Increase,

Manufacturing and Corporate Investment Slowing Down

 

 

Consumption and services improved in May.  Mining and manufacturing slowed down, along with facilities investment and construction investment.  Employment continued to rise in June and consumer prices stayed stable. 

 

Industrial production fell 0.5 percent in May due to weak mining and manufacturing (up 1.9% down 1.7%, m-o-m).  Service output (up 0.4% up 0.1%, m-o-m) improved somewhat.

 

Retail sales (down 1.2% up 0.9%, m-o-m) rose in May.  However, facilities investment (up 4.6% down 8.2%, m-o-m) slowed down, and construction investment (down 2.1% down 0.3%, m-o-m) continued to fall. 

 

Exports declined 13.5 percent year-on-year in June, falling for a seventh consecutive month, due to low semiconductor prices and weak global demand.

 

Consumer confidence edged down 0.4 points to 97.5 in June, and the business sentiment index (BSI) fell 1 point to 75, the BIS outlook for July staying at 75. 

 

The cyclical indicator of the coincident composite index improved 0.2 points in May to 98.6, and the cyclical indicator of the leading composite index fell 0.2 points to 98.1.

 

The economy added 281,000 jobs year-on-year in June as service jobs continued to grow.  The unemployment rate rose 0.3 percentage points to 4.0 percent.

 

Consumer prices continued to be stable in June, rising 0.7 percent year-on-year, backed by the low prices of services and oil products.

 

In June KOSPI rose, the won strengthened and Korea treasury yields went down. 

 

Housing prices continued to decline in June (down 0.13%, m-o-m), along with Jeonse (lump-sum deposits with no monthly payments) prices (down 0.21%, m-o-m).  Housing transactions continued to fall.

 

Global economic situations surrounding the Korean economy have been worsening as uncertainties linger with regard to the US-China trade conflict and the semiconductor demand remains weak amid slowing global economies.

 

While domestic consumption has been improving, exports and investment have yet to pick up.

 

The government will be prepared for external risks, including Japan’s trade curbs, get ready for the spending of the supplementary budget as soon as it is approved by the National Assembly, and work to successfully implement the 2019 economic policies for the second half, which focus on promoting investment, exports and consumption to boost the economy.  

 

Key Statistics

 

 

Employment

 

 

2017

2018

2019

Annual

Q4

Annual

Q1

Q2

Q3

Q4

June

Q1

Q2

May

June

Number of employed (million)

26.73

26.88

26.82

26.28

27.02

27.02

26.97

27.13

26.46

27.26

27.32

27.41

Employment rate (%)

60.8

61.0

60.7

59.6

61.2

61.1

60.9

61.4

59.6

61.3

61.5

61.6

(Seasonally adjusted)

60.8

60.9

60.7

60.9

60.7

60.5

60.7

60.7

60.9

60.7

60.8

60.9

 

 

Consumer Price Index

 

 

2018

2019

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

y-o-y

1.5

1.1

1.4

2.1

2.0

2.0

1.3

0.8

0.5

0.4

0.6

0.7

0.7

m-o-m

-0.2

-0.2

0.9

0.8

-0.2

-0.7

-0.3

-0.1

0.4

-0.2

0.4

0.2

-0.2

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2

2018

2019

Annual

Q1

May

Q1

Mar

Apr¹

May¹

Mining

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

-

-0.4

0.1

-2.9

2.1

1.9

-1.7

(y-o-y)

1.3

-1.1

2.2

-2.1

-2.3

0.2

-0.2

Manufacturing

Production

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

-

-0.4

0.1

-3.0

2.3

1.9

-1.5

(y-o-y)

1.2

-1.4

2.1

-2.1

-2.4

0.0

-0.1

Inventory³

8.0

1.9

-0.8

-1.6

-0.6

3.2

0.9

Shipments

-0.2

-1.1

2.6

-1.9

3.1

-0.9

-1.4

Average operation ratio

73.5

72.8

74.4

71.8

71.5

72.7

71.7

Production capacity (y-o-y)

-0.2

-0.2

-0.7

-0.4

-0.1

-0.9

-0.9

1. Preliminary

2. Including mining, manufacturing, electricity and gas industry

3. End-period

 

 

Service Output

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

 

2017

2018

2019

Annual

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1

Mar

Apr¹

May¹

Service

activity index

1.9

1.1

0.0

2.1

0.9

0.4

0.3

0.4

0.3

0.4

0.4

0.1

1. Preliminary

 

 

Retail Sales

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

 

2017

2018

2019

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Mar

Apr¹

May¹

Retail sales

1.9

4.3

2.1

0.6

-0.2

-0.1

1.3

3.5

-1.2

0.9

(y-o-y)

-

-

5.3

5.0

3.8

3.0

1.7

2.5

1.4

3.4

1. Preliminary

 

 

Facility Investment Index

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

 

2017

2018

2019

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Feb

Mar

Apr¹

May¹

Facility investment index

14.1

-3.8

7.1

-7.6

-7.7

0.0

-5.5

-10.4

10.1

4.6

-8.2

y-o-y

-

-

10.2

-4.8

-13.5

-6.0

-19.6

-26.9

-15.6

-6.3

-11.5

1. Preliminary

 

 

Construction Completed

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

 

2017

2018

2019

Annual

Annual

Q1

Q2

Q3

Q4

Q1

Feb

Mar

Apr¹

May¹

Construction completed (constant)

10.5

-5.3

0.8

-4.1

-3.8

-3.7

1.8

-6.5

5.1

-2.1

-0.3

y-o-y

-

-

0.8

-3.5

-9.7

-7.9

-9.5

-12.2

-6.2

-8.3

-5.3

1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

 

2018

2019

Oct

Nov

Dec

Jan

Feb

Mar

Apr¹

May¹

Cyclical indicator of coincident composite index

99.6

99.3

99.2

99.1

98.6

98.5

98.4

98.6

(m-o-m, points)

-0.1

-0.3

-0.1

-0.1

-0.5

-0.1

-0.1

0.2

Cyclical indicator of leading composite index

99.4

99.1

98.9

98.6

98.3

98.2

98.3

98.1

(m-o-m, points)

-0.3

-0.3

-0.2

-0.3

-0.3

-0.1

0.1

-0.2

1. Preliminary

 

 

Exports and Imports

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

 

2018

2019

Annual

Q1

Q2

Q3

Q4

Jun

Q1

Q2

May

Jun¹

Exports

604.86

145.06

151.62

153.64

154.55

51.08

132.67

138.88

45.89

44.18

(y-o-y)

5.4

9.8

3.1

1.7

7.7

-0.4

-8.5

-8.4

-9.5

-13.5

Average daily exports

2.24

2.16

2.30

2.28

2.22

2.38

2.03

2.03

2.00

2.05

Imports

535.20

132.43

133.15

130.31

139.31

45.00

123.47

128.53

43.64

40.01

(y-o-y)

11.9

13.7

13.0

7.8

12.9

11.0

-6.8

-3.5

-1.8

-11.1

Average daily imports

1.98

1.98

2.02

1.93

2.00

2.09

1.88

1.88

1.90

1.86

1. Preliminary

 

Please refer to the attached PDF.