Current Economic Situation, September 2023

 

 

Services Production, Construction Investment Up,

Industrial Production, Retail Sales, Facilities Investment Down

 

 

In July, services production, construction investment increased while industrial production, retail sales and facilities investment decreased.

                                                                                                                                                

In July, entire production dropped (down 0.7% m-o-m and down 1.4% y-o-y) as industrial production fell (down 2.0% m-o-m and up 8.0% y-o-y) while services production climbed up (up 0.4% m-o-m and up 1.9% y-o-y).

 

Construction investment rose in July (up 0.8% m-o-m and up 10.8% y-o-y), while retail sales dropped (down 3.2% m-o-m and down 1.7% y-o-y) as well as facilities investment (down 8.9% m-o-m and down 11.0% y-o-y).

 

Thanks to the growth of exports in automobiles and vessels, an exports decline slowed to 8.4 percent year-on-year in August compared to that of the previous month. Average daily exports also went down by 8.4 percent from a year ago to $2.16 billion in August.

 

The consumer sentiment index (CSI) in August fell marginally by 0.1 points month-on-month to 103.1. The business survey index (BSI) for the entire sector fell 3 points from a month ago to 71 and the BSI outlook for September rose 2 points to 73.

 

The cyclical indicator of the coincident composite index for July went down by 0.5 points, and the cyclical indicator of the leading composite index went up by 0.4 points.

 

In August, job growth was even stronger while consumer prices rose at a faster pace.                  

 

The economy added 268,000 jobs year-on-year and the unemployment rate fell 0.1 percentage points from a year ago to 2.0 percent.

 

Consumer prices rose at a faster pace by 3.4 percent (up 1.1% m-o-m) and the consumer price index (CPI) excluding the food and energy sectors increased by 3.3 percent, the index excluding the agricultural and petroleum sectors grew by 3.9 percent and the index of the cost of basic necessities rose by 3.9 percent.

 

In August, stock prices dropped, the won weakened and Korean Treasury bond yields climbed up due to concerns over the US’s prolonged monetary tightening and escalating risks related to the Chinese economy.

 

In July, housing price growth turned positive (up 0.03% m-o-m) and a decline in Jeonse[1] prices was slower than that of June (down 0.16% → down 0.04%).

 

The Korean economy has seen continued slowdown in inflation despite monthly fluctuations stemming from rising global oil prices and seasonal factors. At the same time, the economic downturn partially eased thanks to exports improvement, primarily in semiconductors, and continued growth of consumer sentiment as well as employment.

 

Internationally, alongside the anticipations for the global IT industry’s rebound and a surge in Chinese tourists, concerns still remain over economic recession in major countries. At the same time, uncertainties linger driven by monetary tightening, impacts of the Russia-Ukraine war, and volatility in raw material prices.

 

The government will closely monitor risks at home and abroad and improve the country’s economic structure focusing on the stabilization of people’s livelihood including achieving price stability during Chuseok (Korean Thanksgiving day) holidays while going all out to ramp up its export, investment, domestic consumption in the second half of the year.

 

 

Key Statistics

Employment

	2022								2023
	Annual	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug
Number of employed  (million)	28.09	28.48	28.47	28.41	28.39	28.42	28.42	27.81	27.36	27.71	28.22	28.43	28.84	28.81	28.69	28.68
Employment  rate  (%)	62.1	62.9	62.9	62.8	62.7	62.7	62.7	61.3	60.3	61.1	62.2	62.7	63.5	63.5	63.2	63.1
(Seasonally adjusted)	62.1	62.2	62.2	62.3	62.2	62.1	62.1	62.0	62.0	62.6	62.7	62.6	62.8	62.7	62.5	62.6

Consumer Price Index

                                                                                         (%)

 

Retail Sales

(Percentage change from the previous period, %)

	2020	2021					2022					2023
	Annual	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	Jul¹
Retail sales	-0.1	5.8	2.1	2.4	1.2	0.2	-0.3	-1.2	-0.4	0.6	-1.4	1.1	-0.3	-3.2
(y-o-y)	-	-	6.3	5.0	5.4	6.6	-	2.6	-0.2	-0.9	-2.3	-0.4	-0.2	-1.7

1. Preliminary

Facility Investment Index

(Percentage change from the previous period, %)

	2021					2022					2023
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4¹	Q1	Q2	May	Jun¹	Jul¹
Facility investment index	9.6	6.3	1.4	-1.7	-0.4	3.3	0.4	-0.4	8.6	-0.2	-8.8	1.3	3.1	-1.1	-8.9
(y-o-y)	-	12.4	13.2	6.2	6.2	-	-1.3	-2.4	7.5	9.6	-0.5	-1.2	-4.9	-2.4	-11.0

1. Preliminary

  

Construction Completed

 (Percentage change from the previous period, %)

	2021					2022					2023
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Q4	Q1	Q2¹	Apr	May	Jun¹	Jul¹
Construction Completed (Constant)	-6.7	-3.1	-3.5	-0.4	2.7	2.7	0.2	-0.4	1.0	4.9	4.6	-0.7	1.2	0.7	-2.0	0.8
(y-o-y)	-	-8.8	-7.2	-8.1	-3.1	2.7	-1.7	2.0	3.5	6.4	11.5	9.0	12.4	5.7	9.1	10.8

1. Preliminary

Exports and Imports

 (US$ billion, y-o-y, %)

	2021					2022						2023
	Annual	Q1	Q2	Q3	Q4	Annual	Q1	Q2	Q3	Aug	Q4	Q1	Q2	Jul	Aug
Exports	644.40	146.40	156.73	164.54	176.73	683.58	173.40	177.11	174.02	56.61	159.05	151.35	155.85	50.33	51.87
(y-o-y, %)	25.7	12.5	42.0	26.5	24.5	6.1	18.4	13.0	5.8	6.5	-10.0	-12.7	-12.0	-16.5	-8.4
Average daily exports	2.36	2.22	2.27	2.40	2.54	2.51	2.67	2.59	2.52	2.36	2.27	2.24	2.33	2.14	21.6
Imports	615.09	136.60	149.23	156.89	172.37	731.37	177.90	183.53	192.30	66.03	177.64	173.96	159.68	48.70	51.00
(y-o-y, %)	31.5	12.4	37.7	37.5	39.4	18.9	30.2	23.0	22.6	28.0	3.1	-2.2	-13.0	-25.4	-22.8
Average daily imports	2.25	2.07	2.16	2.29	2.48	2.68	2.74	2.68	2.79	2.78	2.54	2.58	2.38	2.07	21.3

Industrial Production (Mining, Manufacturing, Electricity and Gas Production)

                (Percentage change from the previous period, %)

  1. Preliminary

  2. Mining, Manufacturing, Electricity and Gas Production

  3. End-point (month, quarter, and year)

  4. Average operation ratio for the month (or quarter)

  

Service Output

           (Percentage change from the previous period, %)

    1. Preliminary

Composite Indices of Coincident and Leading Indicators

                                                                                           (Points)

	2022				2023
	Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May¹	Jun¹	Jul¹
Cyclical indicator of coincident composite index	101.2	101.1	100.5	99.8	99.3	99.6	100.1	100.3	100.3	100.1	99.6
m-o-m (points)	-0.1	-0.1	-0.6	-0.7	-0.5	0.3	0.5	0.2	0.0	-0.2	-0.5
Cyclical indicator of leading composite index	100.3	100.3	100.1	99.6	99.2	99.0	98.7	98.5	98.6	98.9	99.3
m-o-m (points)	0.0	0.0	-0.2	-0.5	-0.4	-0.2	-0.3	0.1	0.1	0.3	0.4

1. Preliminary

 

Please refer to the attached files.