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Current Economic Situation, February 2021

  • DivisionEconomic Policy Bureau - Economic Analysis Division
  • DateFebruary 19, 2021
  • Tel0442152730

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, %)

Mining and Manufacturing2

2019

2020

Annual

Q4

Dec

Annual¹

Q1

Q2

Q3

Q4¹

Nov¹

Dec¹

Mining

(q-o-q,

m-o-m)

-

1.1

3.6

-

0.1

-7.1

5.7

3.7

0.3

3.7

(y-o-y)

-0.1

2.2

6.1

0.4

5.1

-5.1

1.0

0.6

0.5

3.4

Manufacturing

Production

(q-o-q,

m-o-m)

-

1.3

3.8

-

0.1

-7.5

6.2

3.8

0.4

3.7

(y-o-y)

0.1

2.4

6.9

0.5

5.5

-5.2

1.1

0.6

0.6

3.4

Inventory³

-2.9

-2.7

-2.5

1.4

4.6

-1.3

0.3

-2.3

-1.1

-0.2

Shipments

-0.6

-0.6

3.4

-2.0

-2.0

-6.5

6.7

3.9

0.4

1.3

Average operation ratio

73.2

74.1

75.1

71.3

73.5

66.5

71.2

74.1

73.9

74.5

Production capacity

(y-o-y)

-0.1

0.1

0.6

1.3

1.1

1.6

1.6

1.0

-0.1

1.5

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

 

Ministry of Economy and Finance
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