Seoul: South Korea's industrial production, retail sales, and facilities investment all declined in April from the previous month, data showed Friday, raising further concerns over a potential slowdown of Asia's fourth-largest economy.
According to Yonhap News Agency, industrial production went down 0.8 percent last month, reversing modest gains posted in March, as compiled by Statistics Korea. Retail sales, a gauge of private spending, dropped 0.9 percent from a month earlier in April. Facility investment also saw a decline, falling 0.4 percent from the previous month. This marks the first time since January-and the second since October last year-that all three major economic indicators declined simultaneously.
"The overall decline in April's key indicators was affected by growing internal and external uncertainties, including tariff issues and delayed recovery in consumer sentiment, along with continued weakness in the construction sector," said Lee Doo-won, an official at Statistics Korea. The drop in industrial output was largely driven by a 0.9 percent on-month contraction in the manufacturing sector, considered the backbone of the economy.
Within manufacturing, production of machinery equipment and petroleum-refined products rose by 2.6 percent on-month and 8.9 percent on-month, respectively. However, these gains were offset by declines in automobile and semiconductor production, which fell 4.2 percent on-month and 2.9 percent on-month, respectively. It was the first on-month decline in auto production in five months, following a 6.6 percent on-month drop in November last year.
"Automobile production decreased, mainly due to reduced output of completed vehicles, such as eco-friendly models and special-purpose cars," Lee added, noting that the recent imposition of a 25 percent tariff on imported automobiles by the U.S. administration starting April 3 may have had an impact. On a yearly basis, overall industrial output in April rose 0.4 percent.
The finance ministry, meanwhile, attributed the monthly decline in April to a base effect when compared with the March tally. "Compared with the same month last year, industrial output rose 0.4 percent (in April), with manufacturing output specifically up 4.9 percent," Cho Sung-joon, a ministry official, said. "While April's manufacturing figure posted an on-month decline, we do not view it as particularly alarming."
Retail sales showed lackluster performance across most sectors. Sales of semidurable goods, such as clothing, dropped 2 percent on-month, while durable goods, including home appliances, declined 1.4 percent. Compared with the same month a year earlier, retail sales edged down 0.1 percent.
Facility investment weakened across most areas, except for the transportation equipment sector, which jumped 9.9 percent on-month. Construction investment remained sluggish, with construction orders falling 3.1 percent from the previous month, marking the 10th consecutive month of decline.