Current Economic Situation, September 2020

 

Manufacturing and Services Improve,

Retail Sales and Facilities Investment Slowing

 

 

Manufacturing and service output continued to improve in July, completed construction works picking up.  Retail sales and facilities investment went down.

 

Industrial production rose 0.1 percent from the previous month in July.  Mining and manufacturing improved (up 1.6%, m-o-m and down 2.5%, y-o-y), as well as service output (up 0.3%, m-o-m and down 1.3%, y-o-y).  Industrial production fell 1.6 percent year on year.

 

Retail sales (down 6.0%, m-o-m and up 0.5%, y-o-y) and facilities investment (down 2.2%, m-o-m and up 6.7%, y-o-y) dropped in July.  Completed construction works (up 1.5%, m-o-m and down 0.6%, y-o-y) picked up.

 

Exports fell 9.9 percent year-on-year in August, the fall getting steeper from a 7.1 percent drop in the previous month partly due to fewer days worked (1.5 days).  Average daily exports, an indicator calculated according to the days worked, fell from a year ago (US $1.87 billion (August 2019) → US $1.80 billion (August 2020)).

 

The consumer sentiment index (CSI) improved 4.0 points in August to 88.2.  The business sentiment index (BSI) for the manufacturing sector rose 7 points to 66, and the BSI outlook for September went up 7 points to 68. 

 

The cyclical indicator of the coincident composite index for July increased 0.2 points to 97.2, and the cyclical indicator of the leading composite index improved 0.4 points to 100.3

 

The economy lost 274,000 jobs year-on-year in August.  Job loss slowed from 277,000 of the previous month as service jobs and construction jobs declined at a slower rate.  The unemployment rate rose 0.1 percentage points from a year ago to 3.1 percent.

 

Consumer prices rose 0.7 percent from a year ago in August.  Farm product prices soared due to heavy rains.  Core inflation rose 0.8 percent.

 

KOSPI rose in August on expectations of economic recovery at home and abroad.  The won strengthened and Korea treasury yields rose on concerns over rising issuance.

 

Housing prices rose slowly in August (up 0.61% → up 0.47%, m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices showed a steeper slope (up 0.32% → up 0.44%, m-o-m).

 

Although the economy showed signs of recovery as exports and manufacturing improve, the recovery has faltered due to strengthened social distancing amid worries over the resurgence of COVID-19. 

 

Major economies’ indicators have been improving, but at a slow rate as the pandemic lingers.

 

The government will renew its disease prevention efforts and work to support businesses and households hit by social distancing through emergency assistance programs, including those financed by the 4^th extra budget.

 

 

 

 

Key Statistics

 

 

Employment

 

	2017	2018		2019						2020
	Annual	Annual	Q4	Annual	Q1	Q2	Q3	Aug	Q4	Q1	Q2	Jul	Aug
Number of employed (million)	26.73	26.82	26.97	27.12	26.46	27.26	27.38	27.36	27.39	26.75	26.85	27.11	27.08
Employment rate (%)	60.8	60.7	60.9	60.9	59.6	61.3	61.5	61.4	61.4	59.9	60.0	60.5	60.4
(Seasonally adjusted)	60.8	60.7	60.7	60.9	60.8	60.8	60.9	61.0	61.2	61.1	59.5	59.8	60.1

 

 

 

Consumer Price Index

 

(%)

	2019						2020
	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug
y-o-y	0.0	-0.4	0.0	0.2	0.7	1.5	1.1	1.0	0.1	-0.3	0.0	0.3	0.7
m-o-m	0.2	0.4	0.2	-0.6	0.2	0.6	0.0	-0.2	-0.6	-0.2	0.2	0.0	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					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Service output	1.9	2.3	1.4	0.3	0.3	0.6	0.7	-3.0	-1.5	2.4	2.2	0.3

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Retail sales	1.9	4.3	2.4	0.9	0.5	0.3	1.9	-6.4	6.5	4.6	2.3	-6.0
y-o-y	-	-	-	1.6	2.0	2.2	3.4	-2.9	1.9	1.7	6.3	0.5

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Facility investment index	14.4	-3.6	-6.2	-5.0	3.2	1.0	4.3	-3.0	5.7	-6.5	5.2	-2.2
y-o-y	-	-	-	-18.7	-6.7	-1.9	3.7	7.0	6.3	3.5	13.8	6.7

1. Preliminary

 

Construction Completed

 

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	May	Jun¹	Jul¹
Construction completed (constant)	11.4	-4.2	-6.9	1.0	-1.8	-3.5	1.0	4.1	-4.6	-3.7	-0.4	1.5
y-o-y	-	-	-	-10.2	-6.8	-8.2	-2.9	0.3	-3.8	-5.3	-3.6	-0.6

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2019		2020
	Dec	Jan	Feb	Mar	Apr	May	Jun¹	Jul¹
Cyclical indicator of coincident composite index	100.5	100.7	100.1	99.0	97.6	96.8	97.0	97.2
m-o-m (points)	0.3	0.2	-0.6	-1.1	-1.4	-0.8	0.2	0.2
Cyclical indicator of leading composite index	100.6	100.7	100.7	100.0	99.7	99.4	99.9	100.3
m-o-m (points)	0.4	0.1	0.0	-0.7	-0.3	-0.3	0.5	0.4

1. Preliminary

 

Exports and Imports

 

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

	2017	2018	2019						2020
	Annual	Annual	Annual	Q1	Q2	Q3	Aug	Q4	Q1	Q2	Jul	Aug¹
Exports	573.69	604.86	542.22	132.65	138.49	134.73	44.02	136.36	130.24	110.40	42.83	39.66
(y-o-y, %)	15.8	5.4	-10.4	-8.5	-8.7	-12.3	-14.0	-11.8	-1.8	-20.3	-7.1	-9.9
Average daily exports	2.13	2.24	1.99	2.03	2.02	1.95	1.87	1.96	1.92	1.65	1.71	1.80
Imports	478.48	535.20	503.34	123.80	128.77	124.96	42.46	125.81	121.86	107.98	38.69	35.54
(y-o-y, %)	17.8	11.9	-6.0	-6.5	-3.3	-4.1	-4.3	-9.7	-1.6	-16.1	-11.6	-16.3
Average daily imports	1.78	1.98	1.85	1.89	1.88	1.81	1.81	1.81	1.79	1.61	1.55	1.62

1. Preliminary

 

Please refer to the attached pdf