SEOUL: South Korea’s industrial production rose 1.2 percent in December from a month earlier, posting the first rebound in three months, a government report showed Friday.
The production in all industries declined 1.3 percent in October and 0.4 percent in November each before gaining 1.2 percent in December on a month basis, according to Statistics Korea. The rebound came on the back of improvement in both production and investment among manufacturers.
Production in the manufacturing and mining industries grew 1.2 percent in December from the previous month. It was attributable to the resumption of operations in oil refiners and petrochemical companies after the end of the regular maintenance period. Output in chemical products increased 4.7 percent, with oil-refining activity expanding 7.3 percent.
Inventory among manufacturers reduced 3 percent, and the factory utilization rate in the manufacturing industry averaged 73.8 percent in December, up 1.0 percentage point from the previous month due to a year-end demand.
Production among service companies were steady last month due to slump in finance, insurance and wholesale & retail sectors that offset growth in transport and leisure sectors. Retail sales, which reflect private consumption, reduced 0.1 percent in December from the previous month, falling for two straight months.
The private consumption jumped in October thanks to massive promotion events, called Korea Black Friday, and consumption tax cuts for cars, but it turned downward for two months through December.
Sales of semi-durable goods like clothing tumbled 5 percent as the average temperature of the winter season was higher than usual despite a temporary cold wave. Durable goods sales increased 3.8 percent on demand for cars.
Facility investment declined 6.1 percent in December on a monthly basis as machinery and transport companies spent less on equipment. Construction works completed expanded 7.4 percent as a large number of apartments went on sale and social overhead capital (SOC) was spent much last month. For the whole year of 2015, industrial production increased 1.5 percent, up from a 1.3 percent expansion in 2014.
Production in the manufacturing and mining industries reduced 0.6 percent last year as sluggish exports dragged down the demand for production of ships and electronic devices such as handsets. It marked the first reduction in manufacturing production since 2009 when the global financial crisis peaked.
Manufacturers posted a capacity utilization rate of 74.2 percent in 2015, down 1.9 percentage points from a year earlier. It was the lowest in 32 years since 1998 when the Asian foreign exchange crisis hit South Korea.
Production in the service industry grew 2.9 percent in 2015, recording the biggest yearly expansion in four years. Retail sales increased 3.4 percent last year, with facility investment growing 6.2 percent.
