Production and Consumption Slightly Rebound in June... Facility Investment Falls for Fourth Consecutive Month

In June this year, household spending rebounded for the first time in four months. This is attributed to the alleviation of political uncertainty following the launch of the new government and the rebound in the stock market. However, facility investment continued to decrease for four consecutive months.

According to Statistics Korea's announcement on the 31st, the All Industry Production Index (seasonally adjusted, excluding agriculture, forestry, and fisheries) was 113.8 (with 2020 as 100), up 1.2% from the previous month. All industry production had decreased for two consecutive months in April (-0.7%) and May (-1.1%), but turned to an increase for the first time in three months. The main contributors were increases in semiconductor and automobile production by 6.6% and 4.2%, respectively.

Household consumption also showed a clear trend of improvement. The service sector production, which represents service consumption, increased by 0.5% from the previous month. Retail sales, the indicator of household spending, rose 0.5% from the previous month, marking a return to growth after four months. Consumption of semi-durable goods, including clothing, rose by 4.1%. The June Consumer Sentiment Index (CCSI) recorded 108.7, up 6.9 points from the previous month, the highest in four years.

However, facility investment fell by 3.7% compared to the previous month, continuing its downward trend for the fourth straight month. Facility investment has decreased for four months in a row for the first time since February to June 2018.

Kim Ik-hwan Reporter lovepen@hankyung.com