Current Economic Situation, February 2020

 

Industrial Production Improves Backed by Manufacturing,

Services Slowing Somewhat

 

 

Mining and manufacturing, retail sales, facilities investment and construction investment improved in December 2019.  Services slowed somewhat.

 

Industrial production rose 1.4 percent from the previous month in December due to strong mining and manufacturing (up 3.5%, m-o-m and up 4.2%, y-o-y).  Services edged down (down 0.1%, m-o-m and up 2.8%, y-o-y).  Industrial production rose 3.2 percent year on year.

 

Retail sales (up 0.3%, m-o-m and up 4.6%, y-o-y), facilities investment (up 10.9%, m-o-m and up 11.1%, y-o-y) and construction investment (up 4.1%, m-o-m and down 2.1%, y-o-y) all improved from the previous month in December.

 

Exports continued to decline in January 2020, going down 6.1 percent year-on-year.  The decline, however, was due to fewer days worked (2.5 days).  Average daily exports, an indicator calculated according to the days worked, improved (US $1.92 billion (Jan 2019) → US $2.02 billion (Jan 2020).

 

The consumer sentiment index (CSI) rose 3.7 points in January 2020 to 104.2.  The business sentiment index (BSI) for the manufacturing sector increased 2 points to 76, the outlook for February improving 4 points to 77. 

 

The cyclical indicator of the coincident composite index in December improved 0.2 points to 99.5, and the cyclical indicator of the leading composite index rose 0.4 points to 99.6.

 

The economy added 568,000 jobs year-on-year in January 2020 backed by the service sector.  The unemployment rate fell 0.4 percentage points from a year ago to 4.1 percent.

 

Consumer prices rose 1.5 percent year-on-year in January 2020.  Fresh food prices turned to an increase, petroleum prices staying on an upward track.  Core inflation rose 0.9 percent.

 

KOSPI fell in January 2020.  The won weakened and Korea treasury yields declined. 

 

In January 2020, housing prices continued to rise (up 0.38% → up 0.28%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.22% → up 0.28%, m-o-m).

 

The economy has been recovering.  Production, consumption and facilities investment rose in the fourth quarter of 2019, and the cyclical indicators of both the coincident composite and leading composite indexes improved in December. 

 

Although there are signs of global economic recovery, such as rising DRAM contract prices in January, uncertainties remain in the economy as to how COVID-19 will influence the global economy, including the Chinese economy.

 

The government will continue to work to thoroughly control the disease and provide support for businesses affected by the COVID-19 outbreak.  The government will work to successfully implement measures planned in the 2020 economic policies, those aimed at the economy’s gaining recovery momentum through increased investment, consumption and exports.  

 

 

Key Statistics

 

Employment

 

	2017	2018					2019							2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Jan	Q2	Q3	Q4	Dec	Jan
Number of employed (million)	26.73	26.82	26.28	27.02	27.02	26.97	27.12	26.46	26.23	27.26	27.38	27.39	27.15	26.80
Employment rate (%)	60.8	60.7	59.6	61.2	61.1	60.9	60.9	59.6	59.2	61.3	61.5	61.4	60.8	60.0
(Seasonally adjusted)	60.8	60.7	60.8	60.7	60.6	60.7	60.9	60.8	60.7	60.8	60.9	61.2	61.3	61.6

 

 

Consumer Price Index

 

(%)

	2019												2020
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan
y-o-y	0.8	0.5	0.4	0.6	0.7	0.7	0.6	0.0	-0.4	0.0	0.2	0.7	1.5
m-o-m	-0.1	0.4	-0.2	0.4	0.2	-0.2	-0.3	0.2	0.4	0.2	-0.6	0.2	0.6

 

 

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	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Service output	1.9	2.1	0.9	0.4	0.3	0.4	1.5	0.3	0.0	0.8	0.8	1.4	-0.1

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Retail sales	1.9	4.3	2.1	0.6	-0.2	-0.1	2.4	1.3	1.0	0.2	1.2	3.1	0.3
y-o-y	-	-	5.3	5.0	3.8	3.0	-	1.7	2.0	2.3	3.4	3.6	4.6

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Oct	Nov¹	Dec¹
Facility investment index	14.5	-3.5	6.0	-8.7	-5.4	-1.1	-7.6	-5.4	1.2	1.2	-0.5	0.8	10.9
y-o-y	-	-	10.6	-4.8	-11.8	-6.6	-	-19.6	-8.7	-3.7	-3.5	-0.1	11.1

1. Preliminary

 

 

Construction Completed

 

(Percentage change from the previous period, %)

	2017	2018					2019
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Oct	Nov¹	Dec¹
Construction completed (constant)	10.5	-5.3	0.8	-4.1	-3.8	-3.7	-6.7	1.8	-1.8	-4.3	2.7	-2.1	4.1
y-o-y	-	-	0.8	-3.5	-9.7	-7.9	-	-9.5	-6.4	-7.9	-3.5	-4.8	-2.1

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2019
	May	Jun	Jul	Aug	Sep	Oct¹	Nov¹	Dec¹
Cyclical indicator of coincident composite index	99.5	99.4	99.3	99.5	99.5	99.4	99.3	99.5
m-o-m (points)	0.3	-0.1	-0.1	0.2	0.0	-0.1	-0.1	0.2
Cyclical indicator of leading composite index	98.9	98.7	98.4	98.3	98.5	98.8	99.2	99.6
m-o-m (points)	-0.1	-0.2	-0.3	-0.1	0.2	0.3	0.4	0.4

1. Preliminary

 

Exports and Imports

 

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

	2017	2018	2019								2020
	Annual	Annual	Annual	Q1	Jan	Q2	Q3	Q4	Nov	Dec	Jan¹
Exports	573.69	604.86	542.33	132.66	46.17	138.50	134.75	136.43	44.05	45.71	43.35
(y-o-y, %)	15.8	5.4	-10.3	-8.5	-6.2	-8.7	-12.3	-11.7	-14.4	-5.2	-6.1
Average daily exports	2.13	2.24	1.99	2.03	1.92	2.02	1.95	1.96	1.87	1.99	2.02
Imports	478.48	535.20	503.26	123.73	45.13	128.78	124.94	125.81	40.72	43.70	42.73
(y-o-y, %)	17.8	11.9	-6.0	-6.6	-1.5	-3.3	-4.1	-9.7	-13.0	-0.7	-5.3
Average daily imports	1.78	1.98	1.85	1.89	1.88	1.88	1.81	1.81	1.73	1.90	1.99

1. Preliminary

 

Please refer to the attached pdf