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2019 ECONOMIC POLICIES
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Current Economic Situation, September 2020

  • DivisionEconomic Policy Bureau - Economic Analysis Division
  • DateSeptember 11, 2020
  • Tel0442152730

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 4th 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, %)

Mining and Manufacturing2

2019

2020

Annual

Q2

Jul

Q1

Q2¹

May

Jun¹

Jul¹

Mining

(q-o-q,

m-o-m)

-

1.4

2.3

0.1

-7.1

-7.0

7.2

1.6

(y-o-y)

-0.1

-0.3

1.6

5.1

-5.1

-9.7

-0.5

-2.5

Manufacturing

Production

(q-o-q,

m-o-m)

-

1.5

2.4

0.1

-7.4

-7.0

7.4

1.8

(y-o-y)

0.1

-0.6

1.9

5.5

-5.2

-9.9

-0.5

-2.4

Inventory³

-2.9

-1.6

2.4

4.6

-1.3

-0.1

-1.0

0.2

Shipments

-0.6

0.0

1.5

-2.0

-6.5

-6.8

8.1

1.6

Average operation ratio

73.2

72.3

74.5

73.5

66.5

63.3

68.2

70.0

Production capacity (y-o-y)

-0.1

-0.2

-0.6

1.1

1.6

1.5

1.4

1.1

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

 

Ministry of Economy and Finance
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