Current Economic Situation, January 2020

 

Services and Retail Sales Improve,

Manufacturing and Construction Slowing Down

 

 

Services, retail sales and facilities investment improved in November 2019, while mining & manufacturing slowed down, as well as construction investment.  Job markets continued to improve in December 2019 and consumer prices rose somewhat.

 

Industrial production rose 0.4 percent from the previous month in November backed by services (up 1.4%, m-o-m and up 2.5%, y-o-y).  Mining & manufacturing fell (down 0.5%, m-o-m and down 0.3%, y-o-y).  Industrial production rose 1.2 percent year on year.

 

Retail sales (up 3.0%, m-o-m and up 3.7%, y-o-y) and facilities investment (up 1.1%, m-o-m and up 0.0%, y-o-y) improved in November.  Construction investment went down (down 1.8%, m-o-m and down 4.7%, y-o-y).

 

Exports continued to decline in December, going down 5.2 percent year-on-year after an 11.4 percent fall in the previous month, due to weak global demand, including the semiconductor market.

 

The consumer sentiment index (CSI) dropped 0.5 points in December to 100.4.  The business sentiment index (BSI) for the manufacturing sector stayed flat at 74, and the outlook for January 2020 improved 2 points to 73. 

 

The cyclical indicator of the coincident composite index fell 0.1 points to 99.3, and the cyclical indicator of the leading composite index rose 0.4 points to 99.2.

 

The economy added 516,000 jobs year-on-year in December backed by the service sector.  The unemployment rate stayed flat compared with a year ago at 3.4 percent.

 

Consumer prices rose 0.7 percent year-on-year in December.  Petroleum product prices turned to an increase and farm product prices fell at a slower rate.  Core inflation rose 0.7 percent.

 

KOSPI rose in December, Korea treasury yields fell somewhat, and the won strengthened. 

 

In December, housing prices continued to rise (up 0.19% → up 0.38%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.14% → up 0.22%, m-o-m).

 

The economy has seen services and consumption steadily rising, facilities investment slowly recovering.  However, exports and construction have been weak.

 

 

Although there are signs of recovery in global manufacturing and expectations are growing after the phase one US-China trade deal for rising semiconductor demand, uncertainties continue about how the phase one deal will work for the Korean economy, how fast the semiconductor market will recover and whether the Middle East conflict will go on. 

 

The government will strengthen its risk management and work to help the economy gain recovery momentum through measures to boost investment, consumption and exports, as planned in the 2020 economic policies.  

 

 

Key Statistics

 

Employment

 

	2017	2018						2019
	Annual	Annual	Q1	Q2	Q3	Q4	Dec	Annual	Q1	Q2	Q3	Q4	Nov	Dec
Number of employed (million)	26.73	26.82	26.28	27.02	27.02	26.97	26.64	27.12	26.46	27.26	27.38	27.39	27.51	27.15
Employment rate (%)	60.8	60.7	59.6	61.2	61.1	60.9	60.1	60.9	59.6	61.3	61.5	61.4	61.7	60.8
(Seasonally adjusted)	60.8	60.7	60.9	60.7	60.5	60.7	60.7	60.9	60.9	60.7	60.9	61.2	61.1	61.3

 

 

Consumer Price Index

 

(%)

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

 

 

Mining and Manufacturing

 

            (Percentage change from the previous period, %)

1. Preliminary

2. Including mining, manufacturing, and electricity and gas supply

3. End-period

Service Output

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Sep	Oct¹	Nov¹
Service output	1.9	2.1	0.9	0.4	0.3	0.4	0.3	0.0	0.8	-1.4	0.5	1.4

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Sep	Oct¹	Nov¹
Retail sales	1.9	4.3	2.1	0.6	-0.2	-0.1	1.3	1.0	0.2	-2.3	-0.4	3.0
y-o-y	-	-	5.3	5.0	3.8	3.0	1.7	2.0	2.3	3.0	2.0	3.7

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Oct¹	Nov¹
Facility investment index	14.5	-3.5	6.0	-8.7	-5.4	-1.1	-5.4	1.2	1.2	-0.7	1.1
y-o-y	-	-	10.6	-4.8	-11.8	-6.6	-19.6	-8.7	-3.7	-3.6	0.0

1. Preliminary

 

 

Construction Completed

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Oct¹	Nov¹
Construction completed (constant)	10.5	-5.3	0.8	-4.1	-3.8	-3.7	1.8	-1.8	-4.3	2.6	-1.8
y-o-y	-	-	0.8	-3.5	-9.7	-7.9	-9.5	-6.4	-7.9	-3.7	-4.7

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2019
	Apr	May	Jun	Jul	Aug	Sep¹	Oct¹	Nov¹
Cyclical indicator of coincident composite index	99.2	99.5	99.4	99.3	99.5	99.5	99.4	99.3
m-o-m (points)	0.0	0.3	-0.1	-0.1	0.2	0.0	-0.1	-0.1
Cyclical indicator of leading composite index	99.0	98.9	98.7	98.4	98.3	98.5	98.8	99.2
m-o-m (points)	0.0	-0.1	-0.2	-0.3	-0.1	0.2	0.2	0.4

1. Preliminary

 

Exports and Imports

 

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

	2018				2019
	Annual	Q3	Q4	Dec	Annual	Q1	Q2	Q3	Q4	Nov	Dec¹
Exports	604.86	153.64	154.55	48.21	542.41	132.66	138.52	134.76	134.76	44.05	45.72
(y-o-y, %)	5.4	1.7	7.7	-1.7	-10.3	-8.5	-8.6	-12.3	-11.7	-14.4	-5.2
Average daily exports	2.24	2.28	2.22	2.14	1.99	2.03	2.02	1.95	1.96	1.87	1.99
Imports	535.20	130.31	139.31	44.02	503.23	123.71	128.79	124.94	125.80	40.72	43.70
(y-o-y, %)	11.9	7.8	12.9	1.1	-6.0	-6.6	-3.3	-4.1	-9.7	-13.0	-0.7
Average daily imports	1.98	1.93	2.00	1.96	1.85	1.89	1.88	1.81	1.81	1.73	1.90

1. Preliminary

 

Please refer to the attached pdf