Current Economic Situation, February 2021

 

Manufacturing and Retail Sales Rose,

Services and Construction Slowing

 

Manufacturing, retail sales and facilities investment improved from the previous month, services and construction investment declining.  Job losses continued and consumer price inflation edged up.

 

Industrial production rose 0.5 percent from the previous month in December 2020.  Mining and manufacturing rose (up 3.7%, m-o-m and up 3.4%, y-o-y), and services declined (down 1.1%, m-o-m and down 2.2%, y-o-y).  Industrial production fell 0.3 percent year on year.

 

Retail sales improved (up 0.2%, m-o-m and down 2.0%, y-o-y), as well as facilities investment (up 0.9%, m-o-m and up 5.3%, y-o-y).  Completed construction works fell (down 0.9%, m-o-m and down 2.5%, y-o-y).

 

Exports went up 11.4 percent year-on-year in January 2021 backed by the strong IT sector and more days worked (1 day).  Average daily exports, an indicator calculated according to the days worked, improved 6.5 percent from a year ago (US $2.00 billion, January 2020 → US $2.13 billion, January 2021).

 

The consumer sentiment index (CSI) rose 4.2 points in January to 95.4.  The business sentiment index (BSI) for the manufacturing sector improved 3 points to 85, and the BSI outlook for February went up 4 points to 81. 

 

The cyclical indicator of the coincident composite index for December stayed unchanged at 98.9, and the cyclical indicator of the leading composite index rose 0.5 points to 103.

 

The economy lost 982,000 jobs year-on-year in January, and the unemployment rate rose 1.6 percentage points from a year ago to 5.7 percent.

 

Consumer price inflation edged up in January to a rise of 0.6 percent year-on-year due to high fresh food prices.  Core inflation went up 0.9 percent.

 

KOSPI continued to rise in January on expectations of economic recovery, as well as due to a weak dollar.  The won weakened, and Korea treasury yields went up for mid- to long-term debts amid globally increasing market interest rates and on supply concerns.

 

House price growth slowed in January (up 0.90% → up 0.79%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.97% → up 0.71%, m-o-m).

 

The economy has seen manufacturing and investment improving backed by strong exports.

However, uncertainties hang due to the stricter social distancing amid a third wave of coronavirus as personal services struggle, job markets worsen and domestic demand has yet to recover. 

 

Expectations are growing of global economic recovery, after a slowdown in the fourth quarter amid resurgent virus, as new infections are slowing down, vaccine rollout is accelerated and major economies seek stimulus measures. 

 

The government will work to expand COVID-19 support as the outbreak continues, which will include small business reliefs, unemployment benefits and public job creation.

 

 

Key Statistics

 

Employment

 

	2019					2020								2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Oct	Nov	Dec	Jan
Number of employed (million)	27.12	26.46	27.26	27.38	27.39	26.90	26.75	26.85	27.07	26.95	27.09	27.24	26.53	25.82
Employment rate (%)	60.9	59.6	61.3	61.5	61.4	60.1	59.9	60.0	60.4	60.0	60.4	60.7	59.1	57.4
(Seasonally adjusted)	60.9	60.8	60.9	60.9	61.2	60.1	61.0	59.6	59.9	59.8	59.8	60.1	59.6	58.9

 

 

Consumer Price Index

 

(%)

	2020												2021
	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan
y-o-y	1.5	1.1	1.0	0.1	-0.3	0.0	0.3	0.7	1.0	0.1	0.6	0.5	0.6
m-o-m	0.6	0.0	-0.2	-0.6	-0.2	0.2	0.0	0.6	0.7	-0.6	-0.1	0.2	0.8

 

 

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, %)

	2018	2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Service output	2.3	1.4	0.3	0.3	0.6	0.7	-2.0	-3.0	-1.5	1.9	1.2	0.7	-1.1

1. Preliminary

 

 

Retail Sales

 

(Percentage change from the previous period, %)

	2018	2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Retail sales	4.3	2.4	0.9	0.5	0.3	1.9	-0.2	-6.4	6.5	-0.7	0.5	-0.9	0.2
y-o-y	-	-	1.6	2.0	2.2	3.4	-	-2.9	1.9	1.8	-1.3	-1.5	-2.0

1. Preliminary

 

 

Facility Investment Index

 

(Percentage change from the previous period, %)

	2018	2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Facility investment index	-3.6	-6.2	-5.0	3.2	1.0	4.3	6.0	-3.0	5.6	-0.2	2.8	3.5	0.9
y-o-y	-	-	-18.7	-6.7	-1.9	3.7	-	7.0	6.3	7.8	3.5	5.4	5.3

1. Preliminary

 

Construction Completed

 

(Percentage change from the previous period, %)

	2018	2019					2020
	Annual	Annual	Q1	Q2	Q3	Q4	Annual¹	Q1	Q2	Q3	Q4¹	Nov¹	Dec¹
Construction completed (constant)	-4.2	-6.9	1.0	-1.8	-3.5	1.0	-2.3	4.1	-4.6	-4.1	3.6	4.5	-0.9
y-o-y	-	-	-10.2	-6.8	-8.2	-2.9	-	0.3	-4.1	-2.1	-3.0	1.7	-2.5

1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

(Points)

	2020
	May	Jun	Jul	Aug	Sep	Oct	Nov¹	Dec¹
Cyclical indicator of coincident composite index	96.8	97.0	97.2	97.6	97.9	98.3	98.9	98.9
m-o-m (points)	-0.8	0.2	0.2	0.4	0.3	0.4	0.6	0.0
Cyclical indicator of leading composite index	99.4	99.9	100.3	100.9	101.4	101.8	102.5	103.0
m-o-m (points)	-0.3	0.5	0.4	0.6	0.5	0.4	0.7	0.5

1. Preliminary

 

Exports and Imports

 

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

	2017	2018	2019	2020							2021
	Annual	Annual	Annual	Annual	Q1	Jan	Q2	Q3	Q4	Dec	Jan¹
Exports	573.69	604.86	542.22	512.50	130.18	43.10	110.34	130.07	141.90	51.33	48.02
(y-o-y, %)	15.8	5.4	-10.4	-5.5	-1.9	-6.6	-20.3	-3.5	4.1	12.4	11.4
Average daily exports	2.13	2.24	1.99	1.88	1.91	2.00	1.65	1.86	2.09	2.14	2.13
Imports	478.48	535.20	503.34	467.63	121.50	42.72	108.39	114.07	123.68	44.46	44.25
(y-o-y, %)	17.8	11.9	-6.0	-7.1	-1.9	-5.4	-15.8	-8.7	-1.7	2.2	3.6
Average daily imports	1.78	1.98	1.85	1.71	1.79	1.99	1.62	1.63	1.82	1.86	1.97

1. Preliminary

 

Please refer to the attached pdf