Current Economic Situation, September 2019

 

Manufacturing and Services Improve,

Consumption and Construction Investment Slowing Down

 

 

Manufacturing and services improved in July, along with facility investment. Consumption and construction investment fell.

 

Industrial production rose 1.2 percent from the previous month in July as mining & manufacturing (up 0.1% → up 2.6%, m-o-m) and services (down 1.1% → up 1.0%, m-o-m) improved.

 

Retail sales (down 1.6% → down 0.9%, m-o-m) and construction investment (up 1.2% → down 2.3%, m-o-m) went down in July.  Facility investment continued to rise (up 0.4% → up 2.1%, m-o-m).

 

Exports declined 13.6 percent year-on-year in August, staying on a downward trajectory for nine months in a row, as the global semiconductor market remained weak and global economic slowdown continued. 

 

Consumer confidence fell 3.4 points to 92.5 in August, and the business sentiment index (BSI) for the manufacturing sector decreased 5 points to 68, the outlook for September improving 1 point to 72. 

 

The cyclical indicator of the coincident composite index dropped 0.1 points in July to 98.4, and the cyclical indicator of the leading composite index fell 0.3 points to 97.6.

 

The economy added 425,000 jobs year-on-year in August as service jobs continued to grow.  The unemployment rate fell 1.0 percentage points to 3.0 percent.

 

Consumer prices in August remained unchanged from the previous year as fresh food prices stayed low, as well as oil product prices.  Core inflation rose 0.9 percent.

 

In August KOSPI fell, the won weakened, and Korea treasury yields continued to drop. 

 

Housing prices continued to decline in August (down 0.05%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (down 0.10%, m-o-m).

 

Although the economy grew steadily in July, exports and investment had not picked up.  Uncertainties linger as Japan’s trade curbs and US-China trade conflicts continue, and attacks on Saudi oil facilities may affect the economy.

 

The government will work to boost investment, consumption and exports by implementing fiscal spending as planned, as well as other economy-boosting measures.  The government will also remain alert to external risks and be fully prepared.

 

 

 

Key Statistics

 

Employment

 

	2017		2018						2019
	Annual	Q4	Annual	Q1	Q2	Q3	Q4	Aug	Q1	Q2	Jul	Aug
Number of employed (million)	26.73	26.88	26.82	26.28	27.02	27.02	26.97	26.91	26.46	27.26	27.38	27.36
Employment rate (%)	60.8	61.0	60.7	59.6	61.2	61.1	60.9	60.9	59.6	61.3	61.5	61.4
(Seasonally adjusted)	60.8	60.9	60.7	60.9	60.7	60.5	60.7	60.5	60.9	60.7	60.7	61.1

 

 

Consumer Price Index

 

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

 

 

Mining and Manufacturing Production

            (q-o-q, m-o-m, %)

Mining and Manufacturing2			2018			2019
			Annual	Q2	Jul	Q1	Q2¹	May	Jun¹	Jul¹
Mining		(q-o-q, m-o-m)	-	2.0	0.8	-2.9	1.5	-1.0	0.1	2.6
		(y-o-y)	1.3	2.0	3.2	-2.1	-0.7	0.5	-2.6	0.6
Manufacturing	Production	(q-o-q, m-o-m)	-	2.3	0.5	-3.0	1.6	-1.0	0.2	2.6
		(y-o-y)	1.2	1.9	3.3	-2.1	-0.7	0.5	-2.7	0.8
	Inventory³		8.0	1.7	-0.5	-1.6	3.3	0.9	-0.8	1.3
	Shipments		-0.2	2.1	-0.6	-1.9	0.0	-0.7	1.1	1.7
	Average operation ratio		73.5	73.9	73.9	71.8	72.3	72.1	72.2	74.8
	Production capacity (y-o-y)		-0.2	-0.4	0.1	-0.4	-1.1	-0.9	-1.4	-1.6

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	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Service activity index	1.9	2.1	0.9	0.4	0.3	0.4	0.3	0.0	0.3	-1.1	1.0

1. Preliminary

 

 

Retail Sales

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

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Retail sales	1.9	4.3	2.1	0.6	-0.2	-0.1	1.3	1.0	0.9	-1.6	-0.9
(y-o-y)	-	-	5.3	5.0	3.8	3.0	1.7	2.0	3.4	1.2	-0.3

1. Preliminary

 

 

Facility Investment Index

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

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Facility investment index	14.5	-3.5	6.0	-8.7	-5.4	-1.1	-5.4	1.3	-6.8	0.4	2.1
y-o-y	-	-	10.6	-4.8	-11.8	-6.6	-19.6	-8.7	-10.0	-9.0	-4.7

1. Preliminary

 

 

Construction Completed

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

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Construction completed (constant)	10.5	-5.3	0.8	-4.1	-3.8	-3.7	1.8	-1.9	-0.5	1.2	-2.3
y-o-y	-	-	0.8	-3.5	-9.7	-7.9	-9.5	-6.5	-6.3	-4.4	-6.2

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2018	2019
	Dec	Jan	Feb	Mar	Apr	May¹	Jun¹	Jul¹
Cyclical indicator of coincident composite index	99.2	99.1	98.6	98.5	98.4	98.7	98.5	98.4
(m-o-m, points)	-0.1	-0.1	-0.5	-0.1	-0.1	0.3	-0.2	-0.1
Cyclical indicator of leading composite index	98.9	98.6	98.3	98.2	98.3	98.2	97.9	97.6
(m-o-m, points)	-0.2	-0.3	-0.3	-0.1	0.1	-0.1	-0.3	-0.3

1. Preliminary

 

 

Exports and Imports

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

	2018						2019
	Annual	Q1	Q2	Q3	Q4	Aug	Q1	Q2	Jul	Aug¹
Exports	604.86	145.06	151.62	153.64	154.55	51.18	132.68	138.59	46.09	44.20
(y-o-y)	5.4	9.8	3.1	1.7	7.7	8.7	-8.5	-8.6	-11.0	-13.6
Average daily exports	2.24	2.16	2.30	2.28	2.22	2.13	2.03	2.02	1.84	1.88
Imports	535.20	132.43	133.15	130.31	139.31	44.36	123.55	128.68	43.69	42.48
(y-o-y)	11.9	13.7	13.0	7.8	12.9	9.4	-6.7	-3.4	-2.7	-4.2
Average daily imports	1.98	1.98	2.02	1.93	2.00	1.85	1.89	1.88	1.75	1.81

1. Preliminary