Current Economic Situation, October 2021

 

Construction and Employment Improve,

Manufacturing and Services Slowing

 

Manufacturing, services, retail sales and facilities investment slowed in August, construction investment improving, though.  Employment continued an upward trajectory in September and consumer price inflation slowed somewhat. 

 

Industrial production fell 0.2 percent from the previous month in August due to weak manufacturing (down 0.7%, m-o-m and up 9.6%, y-o-y) and services (down 0.6%, m-o-m and up 4.4%, y-o-y). Compared with a year ago, industrial production rose 6.0 percent.

 

Construction investment (up 1.6%, m-o-m and up 0.3%, y-o-y) improved in August, and retail sales (down 0.8%, m-o-m and up 3.8%, y-o-y) slowed, as well as facilities investment (down 5.1%, m-o-m and up 11.8%, y-o-y).

 

Exports rose 16.7 percent year-on-year in September backed by strong semiconductors, petrochemicals and other major exports.  Average daily exports, an indicator calculated according to the days worked, rose 27.9 percent from a year ago (US $2.08 billion, September 2020 → US $2.66 billion, September 2021).

 

The consumer sentiment index (CSI) rose 1.3 points in September to 103.8.  The business sentiment index (BSI) for the manufacturing sector declined 5 points to 90, and the BSI outlook for October dropped 3 points to 93. 

 

The cyclical indicator of the coincident composite index for August remained flat at 101.3, and the cyclical indicator of the leading composite index dropped 0.3 points to 102.4.

 

The economy added 671,000 jobs year-on-year in September and the unemployment rate fell 0.9 percentage points from a year ago to 2.7 percent.

 

Consumer prices rose 2.5 percent year-on-year in September due to high prices of oil products and personal services.  Core inflation rose 1.9 percent.

 

Stock prices fell in September amid rising inflation concerns and monetary policy shifts in major economies.  The won weakened and Korea treasury yields went up.

 

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).

 

The economy has seen exports stay strong and employment keep improving.  However, uncertainties linger over close-contact services. 

 

Global economic recovery will continue, but at a slower pace given rising commodities prices and supply shortages.

 

The government will work on timely implementation of its economy-boosting measures, such as those to absorb pandemic shocks and maintain the recovery momentum, as well as will work to keep inflation in check and help businesses go back to normal.

 

 

 

 

 

 

 

Key Statistics

 

 

 

Employment

 

	2020						2021
	Annual	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
Number of employed (million)	26.90	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	27.68
Employment rate (%)	60.1	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	61.3
(Seasonally adjusted)	60.1	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	60.8

 

 

Consumer Price Index

 

                                                                                         (%)

	2020					2021
	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
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	2.5
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	0.5

 

 

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, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Jun	Jul¹	Aug¹
Service output	1.4	0.3	0.5	0.7	0.4	-2.0	-2.9	-1.3	2.0	0.9	0.7	1.7	1.6	0.1	-0.6

1. Preliminary

 

 

Retail Sales

 

  (Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Jun	Jul¹	Aug¹
Retail sales	2.4	1.5	0.2	-0.1	2.0	-0.2	-5.7	5.9	-1.1	0.9	1.7	2.7	1.4	-0.5	-0.8
y-o-y	-	1.6	2.0	2.3	3.3	-	-2.9	2.0	1.6	-1.2	6.4	4.4	1.6	7.9	3.8

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	Q2	Jul¹	Aug¹
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	0.7	2.0	-5.1
y-o-y	-	-18.2	-6.3	-1.3	4.5	-	8.1	5.8	7.7	2.8	11.9	12.7	10.9	11.8

1. Preliminary

 

 

Construction Completed

 

(Percentage change from the previous period, %)

	2019					2020					2021
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Q2	Jul¹	Aug¹
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	-2.4	-1.8	1.6
y-o-y	-	-5.9	-2.4	-3.4	2.1	-	-0.8	-5.5	-4.2	-5.3	-7.2	-5.3	-8.0	0.3

1. Preliminary

 

 

Composite Indices of Coincident and Leading Indicators

 

                                                                                     (Points)

	2021
	Jan	Feb	Mar	Apr	May	Jun	Jul¹	Aug¹
Cyclical indicator of coincident composite index	99.4	99.6	100.1	101.1	101.2	101.2	101.3	101.3
m-o-m (points)	-0.2	0.2	0.5	1.0	0.1	0.0	0.1	0.0
Cyclical indicator of leading composite index	101.4	101.6	101.7	102.2	102.5	102.8	102.7	102.4
m-o-m (points)	0.3	0.2	0.1	0.5	0.3	0.3	-0.1	-0.3

1. Preliminary

 

 

Exports and Imports

 

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

	2017	2018	2019	2020						2021
	Annual	Annual	Annual	Annual	Q1	Q2	Q3	Sep	Q4	Q1	Q2	Q3	Sep¹
Exports	573.69	604.86	542.22	512.50	130.18	110.34	130.07	47.82	141.90	146.42	156.75	164.52	55.83
(y-o-y, %)	15.8	5.4	-10.4	-5.5	-1.9	-20.3	-3.5	7.1	4.1	12.5	42.1	26.5	16.7
Average daily exports	2.13	2.24	1.99	1.88	1.91	1.65	1.86	2.08	2.09	2.22	2.27	2.40	2.66
Imports	478.48	535.20	503.34	467.63	124.50	108.39	114.07	39.40	123.68	136.34	149.00	156.84	51.62
(y-o-y, %)	17.8	11.9	-6.0	-7.1	-1.9	-15.8	-8.7	1.7	-1.7	12.2	37.5	37.5	31.0
Average daily imports	1.78	1.98	1.85	1.71	1.79	1.62	1.63	1.71	1.82	2.07	2.16	2.29	2.46

1. Preliminary

 

 

Please refer to the attached pdf