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Current Economic Situation, July 2020

  • DivisionEconomic Policy Bureau - Economic Analysis Division
  • DateJuly 17, 2020
  • Tel0442152730

Current Economic Situation, July 2020

 

Services and Retail Sales Rise,

Manufacturing and Construction Remaining Weak

 

Service output and retail sales rose from the previous month in May.  Manufacturing production and completed construction works fell, as well as facilities investment.

 

Industrial production fell 1.2 percent from the previous month in May.  Service output continued to improve (up 2.3%, m-o-m and down 4.0%, y-o-y), and mining and manufacturing production continued to fall (down 6.7%, m-o-m and down 9.6%, y-o-y).  Industrial production decreased 5.6 percent year on year.

 

Retail sales rose in May (up 4.6%, m-o-m and up 1.7%, y-o-y).  Facilities investment (down 5.9%, m-o-m and up 3.6%, y-o-y) and completed construction works (down 4.3%, m-o-m and down 5.8%, y-o-y) went down.

 

Exports fell 10.9 percent year-on-year in June, declining slowly compared with the previous month backed by more days worked (2 days) and recovering global demand.  Average daily exports, an indicator calculated according to the days worked, fell (US $2.05 billion (June 2019) US $1.67 billion (June 2020)).

 

The consumer sentiment index (CSI) improved 4.2 points in June to 81.8.  The business sentiment index (BSI) for the manufacturing sector improved 2 points to 51, and the BSI outlook for July went up 2 point to 51. 

 

The cyclical indicator of the coincident composite index for May fell 0.8 points to 96.5, and the cyclical indicator of the leading composite index dropped 0.3 points to 98.9

 

The economy lost 352,000 jobs year-on-year in June, service jobs declining at a slower rate and manufacturing job losses accelerating.  The unemployment rate rose 0.3 percentage points from a year ago to 4.3 percent.

 

Consumer prices stayed unchanged from a year ago in June, oil prices continuing to fall and meat prices rising.  Core inflation rose 0.6 percent.

 

KOSPI rose in June on expectations of global economic recovery.  The won strengthened and Korea treasury yields went up.

 

Housing prices continued to rise in June (up 0.14% up 0.41%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.09% up 0.26%, m-o-m).

 

The economy has seen employment declining at a slow rate and domestic demand continuing to improve.  However exports and industrial production remain weak due to sluggish global demand amid the COVID-19 pandemic. 

 

Volatility in the global financial market has eased and some economic indicators improve as major economies are lifting lockdowns, but there are worries over global recession amid continuing uncertainties surrounding the spread of COVID-19 and conflicts between major economies.

 

The government will help the economy take advantage of the recent improvement in domestic consumption, and will work to implement as planned the second-half policies, the 3rd extra budget and the Korean New Deal to boost the economy and prepare for a post COVID-19 world.

 

 

Key Statistics

 

Employment

 

 

2017

2018

2019

2020

Annual

Annual

Q4

Annual

Q1

Q2

Jun

Q3

Q4

Q1

Q2

May

Jun

Number of employed (million)

26.73

26.82

26.97

27.12

26.46

27.26

27.41

27.38

27.39

26.75

26.85

26.93

27.06

Employment rate (%)

60.8

60.7

60.9

60.9

59.6

61.3

61.6

61.5

61.4

59.9

60.0

60.2

60.4

(Seasonally adjusted)

60.8

60.7

60.7

60.9

60.8

60.8

60.9

60.9

61.2

61.1

59.5

59.6

59.7

 

 

Consumer Price Index

 

(%)

 

2019

2020

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

y-o-y

0.7

0.6

0.0

-0.4

0.0

0.2

0.7

1.5

1.1

1.0

0.1

-0.3

0.0

m-o-m

-0.2

-0.3

0.2

0.4

0.2

-0.6

0.2

0.6

0.0

-0.2

-0.6

-0.2

0.2

 

 

Mining and Manufacturing

 

(Percentage change from the previous period, %)

Mining and Manufacturing2

2019

2020

Annual

Q1

May

Q4

Q1¹

Mar

Apr¹

May¹

Mining

(q-o-q,

m-o-m)

-

-2.2

-0.8

1.1

0.1

4.9

-6.7

-6.7

(y-o-y)

-0.1

-2.4

0.7

2.2

5.1

7.7

-5.1

-9.6

Manufacturing

Production

(q-o-q,

m-o-m)

-

-2.4

-0.8

1.3

0.1

5.2

-7.0

-6.9

(y-o-y)

0.1

-2.2

0.5

2.4

5.5

8.2

-5.1

-9.8

Inventory³

-2.9

-4.1

0.3

-2.7

4.6

-0.7

-0.1

0.0

Shipments

-0.6

-1.4

-0.2

-0.6

-2.0

6.9

-7.8

-6.6

Average operation ratio

73.2

71.9

72.4

74.1

73.5

74.4

68.2

63.6

Production capacity (y-o-y)

-0.1

0.6

0.0

0.1

1.1

1.3

1.8

1.5

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

Q3

Q4

Annual

Q1

Q2

Q3

Q4

Q1¹

Mar

Apr¹

May¹

Service output

1.9

2.3

0.3

0.1

1.4

0.3

0.3

0.6

0.7

-3.0

-4.4

0.5

2.3

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

 

2017

2018

2019

2020

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Q1¹

Mar

Apr¹

May¹

Retail sales

1.9

4.3

2.4

0.9

0.5

0.3

1.9

 -6.4

-0.9

5.3

4.6

y-o-y

-

-

-

1.6

2.0

2.2

3.4

-2.9

-8.0

-2.2

1.7

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

 

2017

2018

2019

2020

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Q1¹

Mar

Apr¹

May¹

Facility investment index

14.4

-3.6

-6.2

-5.0

3.2

1.0

4.3

-3.0

7.5

4.6

-5.9

y-o-y

-

-

-

-18.7

-6.7

-1.9

3.7

7.0

10.4

1.5

3.6

1. Preliminary

 

Construction Completed

 

 

(Percentage change from the previous period, %)

 

2017

2018

2019

2020

Annual

Annual

Annual

Q1

Q2

Q3

Q4

Q1¹

Mar

Apr¹

May¹

Construction completed (constant)

11.4

-4.2

-6.9

1.0

-1.8

-3.5

1.0

4.1

4.6

-3.9

-4.3

y-o-y

-

-

-

-10.2

-6.8

-8.2

-2.9

0.3

3.2

-3.2

-5.8

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

 

2019

2020

Oct

Nov

Dec

Jan

Feb

Mar

Apr¹

May¹

Cyclical indicator of coincident composite index

100.0

99.9

100.2

100.5

99.8

98.6

97.3

96.5

m-o-m (points)

0.0

-0.1

0.3

0.3

-0.7

-1.2

-1.3

-0.8

Cyclical indicator of leading composite index

99.4

99.8

100.2

100.3

100.2

99.6

99.2

98.9

m-o-m (points)

0.3

0.4

0.4

0.1

-0.1

-0.6

-0.5

-0.3

1. Preliminary

 

Exports and Imports

 

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

 

2017

2018

2019

2020

Annual

Annual

Annual

Q1

Q2

Jun

Q3

Q4

Q1

Q2

May

Jun¹

Exports

573.69

604.86

542.22

132.65

138.49

44.01

134.73

136.36

130.24

110.40

34.85

39.23

(y-o-y, %)

15.8

5.4

-10.4

-8.5

-8.7

-13.8

-12.3

-11.8

-1.8

-20.3

-23.7

-10.9

Average daily exports

2.13

2.24

1.99

2.03

2.02

2.05

1.95

1.96

1.92

1.65

1.62

1.67

Imports

478.48

535.20

503.34

123.80

128.77

40.10

124.96

125.81

121.86

107.98

34.46

35.60

(y-o-y, %)

17.8

11.9

-6.0

-6.5

-3.3

-10.9

-4.1

-9.7

-1.6

-16.1

-21.0

-11.2

Average daily imports

1.78

1.98

1.85

1.89

1.88

1.87

1.81

1.81

1.79

1.61

1.60

1.51

1. Preliminary

 

Please refer to the attached pdf

 

Ministry of Economy and Finance
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