Current Economic Situation, November 2020

 

Production and Consumption Improve,

Employment Staying Weak

 

Production indicators, as well as expenditure indicators, improved in September. 

 

Industrial production rose 2.3 percent from the previous month in September.  Mining and manufacturing increased (up 5.4%, m-o-m and up 8.0%, y-o-y), as well as services output (up 0.3%, m-o-m and up 0.0%, y-o-y).  Industrial production improved 3.4 percent year on year.

 

Retail sales (up 1.7%, m-o-m and up 4.4%, y-o-y) rose.  Facilities investment (up 7.4%, m-o-m and up 16.8%, y-o-y) and completed construction works (up 6.4%, m-o-m and up 6.3%, y-o-y) went up.

 

Exports declined 3.6 percent year-on-year in October due to fewer days worked (2 days).  Average daily exports, an indicator calculated according to the days worked, went up 5.6 percent from a year ago (US $2.03 billion (October 2019) → US $2.14 billion (October 2020)).

 

The consumer sentiment index (CSI) jumped by 12.2 points in October to 91.6.  The business sentiment index (BSI) for the manufacturing sector rose 11 points to 79, and the BSI outlook for November went up 8 points to 76. 

 

The cyclical indicator of the coincident composite index for September increased 0.3 points to 97.9, and the cyclical indicator of the leading composite index rose 0.4 points to 101.3

 

The economy lost 421,000 jobs year-on-year in October, and the unemployment rate rose 0.7 percentage points from a year ago to 3.7 percent.

 

Consumer prices rose 0.1 percent from a year ago in October as government support for cell phone service fees brought down public service prices.  Core inflation rose 0.1 percent.

 

KOSPI struggled in October amid growing concerns over the resurging virus in major economies.  The won strengthened due to a strong yuan and Korea treasury yields increased in line with rising market interest rates.

 

Home price growth continued to slow down in October (up 0.42% → up 0.32%, m-o-m), and Jeonse (lump-sum deposits with no monthly payments) prices rose at a slower rate (up 0.53% → up 0.47%, m-o-m).

 

Although the economy has seen exports and production improving, as well as consumption and investment, services and employment remain weak and there are uncertainties over coronavirus resurging in major economies. 

 

Worries continue as to whether the virus resurgence and subsequent lockdowns in global economies would lead to slowing recovery, but at the same time expectations soar for COVID-19 vaccines.

 

The government will continue with its disease prevention efforts, while working to help the economy recover, such as by properly managing fiscal resources, as well as through measures to boost consumption and promote exports.

 

 

 

Key Statistics

 

 

Employment

 

	2018	2019						2020
	Annual	Annual	Q1	Q2	Q3	Q4	Oct	Q1	Q2	Q3	Aug	Sep	Oct
Number of employed (million)	26.82	27.12	26.46	27.26	27.38	27.39	27.51	26.75	26.85	27.07	27.08	27.01	27.09
Employment rate (%)	60.7	60.9	59.6	61.3	61.5	61.4	61.7	59.9	60.0	60.4	60.4	60.3	60.4
(Seasonally adjusted)	60.7	60.9	60.8	60.8	60.9	61.2	61.1	61.1	59.5	59.9	60.1	59.8	59.8

 

 

 

Consumer Price Index

 

(%)

	2019			2020
	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct
y-o-y	0.0	0.2	0.7	1.5	1.1	1.0	0.1	-0.3	0.0	0.3	0.7	1.0	0.1
m-o-m	0.2	-0.6	0.2	0.6	0.0	-0.2	-0.6	-0.2	0.2	0.0	0.6	0.7	-0.6

 

 

 

Mining and Manufacturing

 

(Percentage change from the previous period, %)

1. Preliminary

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

3. End-period

 

 

 

Service Output

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Jul	Aug¹	Sep¹
Service output	1.9	2.3	1.4	0.3	0.3	0.6	0.7	-3.0	-1.5	1.9	0.3	-1.0	0.3

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Jul	Aug¹	Sep¹
Retail sales	1.9	4.3	2.4	0.9	0.5	0.3	1.9	-6.4	6.5	-0.7	-6.0	3.0	1.7
y-o-y	-	-	-	1.6	2.0	2.2	3.4	-2.9	1.9	1.8	0.5	0.3	4.4

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Jul	Aug¹	Sep¹
Facility investment index	14.4	-3.6	-6.2	-5.0	3.2	1.0	4.3	-3.0	5.6	-0.2	-0.8	-4.1	7.4
y-o-y	-	-	-	-18.7	-6.7	-1.9	3.7	7.0	6.3	7.8	8.1	-1.4	16.8

1. Preliminary

 

Construction Completed

 

(Percentage change from the previous period, %)

	2017	2018	2019					2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Q3¹	Jul	Aug¹	Sep¹
Construction completed (constant)	11.4	-4.2	-6.9	1.0	-1.8	-3.5	1.0	4.1	-4.6	-3.6	0.9	-7.3	6.4
y-o-y	-	-	-	-10.2	-6.8	-8.2	-2.9	0.3	-4.1	-1.6	-1.2	-9.6	6.3

 1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

	2020
	Feb	Mar	Apr	May	Jun	Jul	Aug¹	Sep¹
Cyclical indicator of coincident composite index	100.1	99.0	97.6	96.8	97.0	97.2	97.6	97.9
m-o-m (points)	-0.6	-1.1	-1.4	-0.8	0.2	0.2	0.4	0.3
Cyclical indicator of leading composite index	100.7	100.0	99.7	99.4	99.9	100.3	100.9	101.3
m-o-m (points)	0.0	-0.7	-0.3	-0.3	0.5	0.4	0.6	0.4

1. Preliminary

 

Exports and Imports

 

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

	2017	2018	2019						2020
	Annual	Annual	Annual	Q1	Q2	Q3	Q4	Oct	Q1	Q2	Q3	Oct¹
Exports	573.69	604.86	542.22	132.65	138.49	134.73	136.36	46.65	130.23	110.37	130.37	44.98
(y-o-y, %)	15.8	5.4	-10.4	-8.5	-8.7	-12.3	-11.8	-15.0	-1.8	-20.3	-3.2	-3.6
Average daily exports	2.13	2.24	1.99	2.03	2.02	1.95	1.96	2.03	1.92	1.65	1.86	2.14
Imports	478.48	535.20	503.34	123.80	128.77	124.96	125.81	41.40	121.55	108.02	113.78	39.00
(y-o-y, %)	17.8	11.9	-6.0	-6.5	-3.3	-4.1	-9.7	-14.6	-1.6	-16.1	-8.9	-5.8
Average daily imports	1.78	1.98	1.85	1.89	1.88	1.81	1.81	1.80	1.79	1.61	1.63	1.86

1. Preliminary

 

 

Please refer to the attached pdf