Ministry of Economy and Finance

Current Economic Situation, September 2021

Manufacturing, Services and Facilities Investment Grow,

Retail Sales Slowing and Employment Improving

Manufacturing, services and facilities investment improved in July, retail sales and construction investment slowing. August employment data showed steady recovery and consumer prices reflected an inflationary trend.

Industrial production fell 0.5 percent from the previous month in July due to a weak public sector (down 8.3%, m-o-m and up 2.7, y-o-y), despite strong manufacturing (up 0.4%, m-o-m and up 7.9%, y-o-y) and services (up 0.2%, m-o-m and up 4.2%, y-o-y). Compared with a year ago, industrial production rose 4.7 percent.

Retail sales (down 0.6%, m-o-m and up 7.9%, y-o-y) and construction investment (down 1.9%, m-o-m and down 8.1%, y-o-y) slowed in July, and facilities investment went up (up 3.3%, m-o-m and up 11.7%, y-o-y).

Exports rose 34.9 percent year-on-year in August backed by strong semiconductors, petrochemicals and other major products. Average daily exports, an indicator calculated according to the days worked, rose 29.0 percent from a year ago (US $1.79 billion, August 2020 → US $2.31 billion, August 2021).

The consumer sentiment index (CSI) fell 0.7 points in August to 102.5. The business sentiment index (BSI) for the manufacturing sector declined 2 points to 95, and the BSI outlook for September gained 4 points to 96.

The cyclical indicator of the coincident composite index for July rose 0.1 points to 101.3, and the cyclical indicator of the leading composite index dropped 0.2 points to 102.6.

The economy added 518,000 jobs year-on-year in August and the unemployment rate fell 0.5 percentage points from a year ago to 2.6 percent.

Consumer prices rose 2.6 percent year-on-year in August due to high prices of fresh food and oil products. Core inflation rose 1.8 percent.

Stock prices fell in August due to foreign net selling and Korea treasury yields rose in line with US treasury yields. The won weakened amid a strengthening dollar.

Housing prices continued to rise in August (up 0.85% → up 0.96%, m-o-m), as well as Jeonse (lump-sum deposits with no monthly payments) prices (up 0.59% → up 0.63%, m-o-m).

Exports have been strong and employment keeps improving, despite the new wave of corona infections. However, uncertainties are growing with regard to the real economic recovery, particularly the recovery of close-contact services.

Global economic recovery is going on backed by major economies’ expansive vaccine rollouts, but meanwhile, inflation concerns are growing and real economic indicators are being affected by the delta variant.

The government will work on a fast delivery of pandemic relief programs, including those to stimulate consumption, as well as on measures to control inflation and support working households.

Key Statistics

Employment

	2020							2021
	Annual	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug
Number of employed (million)	26.90	27.11	27.08	27.01	27.09	27.24	26.53	25.82	26.37	26.92	27.21	27.55	27.64	27.65	27.60
Employment rate (%)	60.1	60.5	60.4	60.3	60.4	60.7	59.1	57.4	58.6	59.8	60.4	61.2	61.3	61.3	61.2
(Seasonally adjusted)	60.1	59.9	60.0	59.8	59.8	60.1	59.6	58.9	60.1	60.3	60.4	60.6	60.6	60.7	60.7

Consumer Price Index

(%)

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

Mining and Manufacturing