Industry Trends
Industrial Trends
[2024 June] Industry Trends
2024.06.14
All Industries
In March, production in the mining and manufacturing industries turned negative as production in many sectors, including semiconductors and automotive, declined (Feb. 2024: +2.9 → Mar. 2024: △3.2 percent). Service industry production was slightly reduced (Feb. 2024: +0.5 → Mar. 2024: △0.8 percent) with transportation and warehousing sectors growing (+1.4 percent) and other face-to-face sectors, such as accommodation and food services (△4.4 percent) and leisure and hospitality (△1.7 percent), declining. Despite a decrease in the semi-durable goods sector (△2.7 percent), retail sales turned positive (Feb'24: △3.0 percent → Mar'24: +1.6 percent), driven by an increase in durable goods (3.0 percent) and non-durable goods (2.4 percent). After a strong improvement in the previous month, capital investment shrank (Feb. 24: +9.6 percent → Mar. 24: -6.6 percent) as transportation equipment (-2.9 percent) and machinery (-7.8 percent) declined together. Construction completed declined (Feb'24: +1.0 → Mar'24: -8.7 percent) in both building (-9.5 percent) and civil engineering (-6.0 percent), reflecting a base effect after a strong increase at the beginning of the year. The cyclical change in the coincident index turned negative for the first time in three months due to a decline in domestic consumption, exports and manufacturing and mining production. The cyclical change in the leading index turned negative due to declines in construction orders and machinery domestic consumption and shipments.
The Korean economy is showing clear signs of a balanced recovery, with an export-led recovery and signs of domestic consumption picking up. However, upside and downside risks coexist. On the production side, the outlook for a soft landing in the global economy, along with expectations of an improvement in the IT industry and global manufacturing, are positive contributors. On the downside, geopolitical unrest, supply chain risks, and monetary policy uncertainty are weighing on the economy. On the spending side (consumption and investment), expectations of growing overseas arrivals, the Family Month in May, and the extended expiration of the National Strategic Technology Tax Credit are upside factors, while household debt, real estate PF risks and weak construction orders are downside factors.
In March 2024, Korea's industrial production moderated after four consecutive months of growth across industries, with the first quarter as a whole showing a sound recovery.
| Subject | All industries | Mining & manufacturing |
Service | Retail sales | Equipment investment |
Construction completed |
|---|---|---|---|---|---|---|
| ‘ Mar. 2024(%) | ▲2.1 | ▲3.2 | ▲0.8 | ∆1.6 | ▲6.6 | ▲8.7 |
In March, production in the mining and manufacturing industries turned negative as production in many sectors, including semiconductors and automotive, declined (Feb. 2024: +2.9 → Mar. 2024: △3.2 percent). Service industry production was slightly reduced (Feb. 2024: +0.5 → Mar. 2024: △0.8 percent) with transportation and warehousing sectors growing (+1.4 percent) and other face-to-face sectors, such as accommodation and food services (△4.4 percent) and leisure and hospitality (△1.7 percent), declining. Despite a decrease in the semi-durable goods sector (△2.7 percent), retail sales turned positive (Feb'24: △3.0 percent → Mar'24: +1.6 percent), driven by an increase in durable goods (3.0 percent) and non-durable goods (2.4 percent). After a strong improvement in the previous month, capital investment shrank (Feb. 24: +9.6 percent → Mar. 24: -6.6 percent) as transportation equipment (-2.9 percent) and machinery (-7.8 percent) declined together. Construction completed declined (Feb'24: +1.0 → Mar'24: -8.7 percent) in both building (-9.5 percent) and civil engineering (-6.0 percent), reflecting a base effect after a strong increase at the beginning of the year. The cyclical change in the coincident index turned negative for the first time in three months due to a decline in domestic consumption, exports and manufacturing and mining production. The cyclical change in the leading index turned negative due to declines in construction orders and machinery domestic consumption and shipments.
The Korean economy is showing clear signs of a balanced recovery, with an export-led recovery and signs of domestic consumption picking up. However, upside and downside risks coexist. On the production side, the outlook for a soft landing in the global economy, along with expectations of an improvement in the IT industry and global manufacturing, are positive contributors. On the downside, geopolitical unrest, supply chain risks, and monetary policy uncertainty are weighing on the economy. On the spending side (consumption and investment), expectations of growing overseas arrivals, the Family Month in May, and the extended expiration of the National Strategic Technology Tax Credit are upside factors, while household debt, real estate PF risks and weak construction orders are downside factors.
※ Source: Ministry of Economy and Finance(moef.go.kr)
Trends by Industry
- Automotive
-
‘Domestic demand in February Fell Year-on-Year due to Fewer Working Days and Lower Supply’
→ Exports in March decreased by 5.5 크레이지 슬롯 year-on-year, affected by fewer working days and the previous year’s base effect. Domestic consumption in February fell by 21.4 크레이지 슬롯 year-on-year due to fewer working days and lower supply. Production in February decreased year-on-year due to some plant shutdowns and fewer working days.
- Shipbuilding
-
‘Exports Grew for 8th Consecutive Month Amid Continued Decline in Production, Shipments, and Capacity Utilization Rate’
→ February production and shipments decreased by 16.6 크레이지 슬롯 and 19.5 크레이지 슬롯 year-on-year, respectively, due to the previous month’s base effect. Exports increased by 64.3 크레이지 슬롯 in March to continue growing for eight straight months, as high-end ships such as container ships and LNG carriers and offshore plants were cleared. Despite increased imports of ships, ship engines and parts, imports declined by 0.4 크레이지 슬롯 in February, offset by a one-time import of offshore structures in the same month of the previous year. In February, Korea's ship orders ranked first in the world, accounting for 47.8 크레이지 슬롯 (2.11 million CGT) of the world's total ship orders, driven by large orders for LNG carriers.
- General machinery
-
‘Production and Exports Turned Negative’
→ February production fell by 8.6 크레이지 슬롯 year-on-year with domestic consumption and exports slowing down together. While exports to the United States and Latin America showed strong performance and those to India and the Middle East started growing, March exports decreased by 10.0 크레이지 슬롯 year-on-year to decline for the first time in eleven months, due to a decline in exports to China and the EU. Imports fell by 5.5 크레이지 슬롯 from a year ago in February as Korean companies’ demand and exports slowed down.
- Steel
-
‘Exports Continued to be Affected by Falling Unit Prices, and Production Started Falling on Weak Domestic Consumption’
→ February production decreased by 4.2 크레이지 슬롯 year-on-year as the slowdown in the construction industry led to reduced production of bar steel, while production of major sheet products such as medium and thick plates and galvanized steel continued to increase. Despite increased exports to North America, which is Korea’s largest export market, March exports decreased by 7.8 크레이지 슬롯 year-on-year, weighed by weak unit prices and sluggish exports to major countries such as Japan, India, and ASEAN. Imports decreased 15.7 크레이지 슬롯 year-on-year in February as sluggish domestic consumption led to slow import from major countries and falling unit prices.
- Oil refining
-
‘Exports Increased by 3.1 크레이지 슬롯 Year-on-Year, Led by Increased Volume’
→ February production increased by 6.8 크레이지 슬롯 from a year ago, supported by growing domestic consumption and higher capacity utilization of refining facilities. March exports increased by 3.1 크레이지 슬롯 year-on-year due to expanding volumes, while unit prices declined slightly from a year ago.
- Wireless communication devices
-
‘Exports Grew by 5.5 크레이지 슬롯 After Declining Since 2022’
→March exports saw an increase of 5.5 크레이지 슬롯 year-on-year, as smartphone exports fell by 7.6 크레이지 슬롯 but smartphone parts exports grew by 12.2 크레이지 슬롯. Production in February fell by 21.5 크레이지 슬롯 year-on-year and shipments were down slightly by 7.4 크레이지 슬롯 from a year ago, due to a slump in parts exports that continued up to the beginning of 2024. Imports in February fell by 16.6 크레이지 슬롯 year-on-year, led by a significant decline in smartphone imports.
- Semiconductor
-
‘Semiconductor Exports Increased for Five Straight Months’
→ March exports totaled USD 11.671 billion to grow by 35.7 크레이지 슬롯 year-on-year and record the second-best March on record after 2022. The semiconductor production index for February continued strong growth to increase by 65.3 크레이지 슬롯 year-on-year and reaching 141.5.
- Display
-
‘Diversification of OLED Products Helped Increase Production’
→February production increased by 16.3 크레이지 슬롯 year-on-year thanks to the diversification of OLED products. Driven by the increased size of panels, March display exports increased by 16.2 크레이지 슬롯 to grow for eight months in a row. due to larger panels, marking the eighth consecutive month of export growth.
* Please note that the latest data available in Statistics Korea are for the previous month in the case of exports and the month prior to the previous one for production.
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