Current Economic Situation, July 2021

 

Production and Demand Slow, Employment Improving

 

Manufacturing, services, retail sales, facilities investment and construction investment slowed in May. Employment continued to improve in June and consumer price growth eased.

 

Industrial production rose 0.1 percent from the previous month in May due to increased public sector spending. Mining and manufacturing fell (down 0.7%, m-o-m and up 15.6%, y-o-y), as well as services (down 0.2%, m-o-m and up 4.4%, y-o-y). Compared with a year ago, industrial production rose 7.3 percent.

 

Retail sales (down 1.8%, m-o-m and up 3.1%, y-o-y) and facilities investment (down 3.5%, m-o-m and up 11.0%, y-o-y) slowed, as well as construction investment (down 4.1%, m-o-m and down 7.6%, y-o-y).

 

Exports jumped 39.7 percent year-on-year in June due to strong chips, petrochemicals and other major products. Average daily exports, an indicator calculated according to the days worked, improved 36.8 percent from a year ago (US $1.67 billion, June 2020 → US $2.28 billion, June 2021).

 

The consumer sentiment index (CSI) rose 5.1 points in June to 110.3. The business sentiment index (BSI) for the manufacturing went up 2 points to 98, and the BSI outlook for July improved 2 points to 99.

 

The cyclical indicator of the coincident composite index for May rose 0.2 points to 101.4, and the cyclical indicator of the leading composite index increased 0.4 points to 104.1.

 

The economy added 582,000 jobs year-on-year in June and the unemployment rate fell 0.5 percentage points from a year ago to 3.8 percent.

 

Consumer prices rose 2.4 percent year-on-year in June as fresh food prices stabilize and the low base effect on oil prices wear off. Core inflation rose 1.5 percent.

 

Stock prices rose in June on expectations of economic recovery at home and worldwide. The won weakened and Korea treasury yields went up amid positive outlooks for BOK’s rate hike.

 

Home-prices continued to rise in June (up 0.70% → up 0.79%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.36% → up 0.45%, m-o-m).

 

The economy, once seeing exports, consumption and employment recover strongly, has faltered due to a fresh resurgence of the virus affecting the real economy.

 

Recovery is expected to continue in major economies, but there are pressures from inflation worries, as well as from a new wave of infection.

 

The government will do its utmost to keep the disease under control and strengthen risk management, as well as working to boost consumption, ensure job security and bolster pandemic supports through its second half economic policies and supplementary budget.

 

 

 

 

 

 

Key Statistics

 

 

Employment

 

	2020									2021
	Annual	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
Number of employed (million)	26.90	26.93	27.06	27.11	27.08	27.01	27.09	27.24	26.53	25.82	26.37	26.92	27.21	27.55	27.64
Employment rate (%)	60.1	60.2	60.4	60.5	60.4	60.3	60.4	60.7	59.1	57.4	58.6	59.8	60.4	61.2	61.3
(Seasonally adjusted)	60.1	59.6	59.7	59.9	60.0	59.8	59.8	60.1	59.6	58.9	60.1	60.3	60.4	60.6	60.6

 

 

Consumer Price Index

(%)

	2020							2021
	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun
y-o-y	0.0	0.3	0.7	1.0	0.1	0.6	0.5	0.6	1.1	1.5	2.3	2.6	2.4
m-o-m	0.2	0.0	0.6	0.7	-0.6	-0.1	0.2	0.8	0.5	0.1	0.2	0.1	-0.1

 

 

Mining and Manufacturing

(Percentage change from the previous period, %)

Mining and Manufacturing2			2019	2020					2021
			Annual	Annual	Q1	Q2	Q3	Q4	Q1	Feb	Mar	Apr¹	May¹
Mining		(q-o-q, m-o-m)	-	-	0.1	-7.1	5.7	2.9	3.4	4.2	-0.7	-1.6	-0.7
		(y-o-y)	0.4	-0.4	5.1	-5.1	1.0	0.0	4.4	0.8	4.6	12.6	15.6
Manufacturing	Production	(q-o-q, m-o-m)	-	-	-0.6	-6.9	6.4	3.1	3.6	4.7	-0.8	-1.6	-1.0
		(y-o-y)	0.5	-0.3	5.0	-6,0	0.4	-0.1	4.4	0.9	4.7	13.2	16.0
	Inventory³		-	-	2.2	-0.1	-0.3	-1.2	-2.3	0.4	-2.0	-0.3	0.1
	Shipments		-	-	-2.0	-6.5	6.7	3.5	2.5	2.2	-0.5	-0.9	-0.2
	Average operation ratio		73.2	71.3	73.5	66.5	71.2	73.8	75.1	77.3	74.9	73.8	73.8
	Production capacity (y-o-y)		-0.1	0.8	1.1	1.6	1.6	0.4	1.4	1.1	1.5	1.3	1.3

1. Preliminary

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

3. End-period

 

 

Service Output

(Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Feb	Mar	Apr¹	May¹
Service output	1.4	0.3	0.5	0.7	0.4	-2.0	-2.9	-1.3	2.0	0.9	0.7	1.1	1.3	0.2	-0.2

1. Preliminary

 

 

Retail Sales

(Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Feb	Mar	Apr¹	May¹
Retail sales	2.4	1.5	0.2	-0.1	2.0	-0.2	-5.7	5.9	-1.1	0.9	1.7	-0.9	2.5	2.1	-1.8
y-o-y	-	1.6	2.0	2.3	3.3	-	-2.9	2.0	1.6	-1.2	6.4	8.2	11.1	8.7	3.1

1. Preliminary

 

 

Facility Investment Index

(Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Mar	Apr¹	May¹
Facility investment index	-5.7	-3.4	2.1	2.0	3.4	6.0	-1.0	2.7	2.2	0.8	6.9	0.1	3.8	-3.5
y-o-y	-	-18.2	-6.3	-1.3	4.5	-	8.1	5.8	7.7	2.8	11.9	9.6	17.1	11.0

1. Preliminary

 

 

Construction Completed

(Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Mar	Apr¹	May¹
Construction completed (constant)	-2.3	2.6	0.2	-2.2	1.0	-4.1	-0.7	-2.9	-2.8	2.5	-3.6	0.4	-2.2	-4.1
y-o-y	-	-5.9	-2.4	-3.4	2.1	-	-0.8	-5.5	-4.2	-5.3	-7.2	-5.6	-3.2	-7.6

1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

(Points)

	2020			2021
	Oct	Nov	Dec	Jan	Feb	Mar	Apr¹	May¹
Cyclical indicator of coincident composite index	99.0	99.5	99.7	99.4	99.7	100.2	101.2	101.4
m-o-m (points)	0.5	0.5	0.2	-0.3	0.3	0.5	1.0	0.2
Cyclical indicator of leading composite index	101.4	102.0	102.4	102.7	102.9	103.2	103.7	104.1
m-o-m (points)	0.4	0.6	0.4	0.3	0.2	0.3	0.5	0.4

1. Preliminary

 

Exports and Imports

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

	2017	2018	2019	2020						2021
	Annual	Annual	Annual	Annual	Q1	Q2	Jun	Q3	Q4	Q1	Q2¹	Jun¹
Exports	573.69	604.86	542.22	512.50	130.18	110.34	39.21	130.07	141.90	146.45	156.78	54.80
(y-o-y, %)	15.8	5.4	-10.4	-5.5	-1.9	-20.3	-10.9	-3.5	4.1	12.5	42.1	39.7
Average daily exports	2.13	2.24	1.99	1.88	1.91	1.65	1.67	1.86	2.09	2.22	2.27	2.28
Imports	478.48	535.20	503.34	467.63	124.50	108.39	35.79	114.07	123.68	136.10	148.95	50.36
(y-o-y, %)	17.8	11.9	-6.0	-7.1	-1.9	-15.8	-10.7	-8.7	-1.7	12.0	37.4	40.7
Average daily imports	1.78	1.98	1.85	1.71	1.79	1.62	1.52	1.63	1.82	2.06	2.16	2.10

1. Preliminary