[Breaking] August industrial production 'flat'… retail sales 2.4%↓·facility investment 1.1%↓

Uk Jin

Summary

It reported that August retail sales decreased 2.4%, recording the largest decline in four months.
Industrial production was flat at the same level as the previous month, and facility investment decreased by 1.1%.
The coincident and leading composite indices, which indicate the economy, rose by 0.2p and 0.5p, respectively.

Retail sales, which had shown strength in July due to livelihood recovery consumption coupons and a recovery in consumer sentiment, turned negative last month.

According to the 'August Industrial Activity Trends' released by Statistics Korea on the 30th, the retail sales index last month fell 2.4% from the previous month. Returning to negative after four months, it showed the largest decline since February last year (-3.5%).

It appears to reflect a base effect from the 2.7% increase in July due to the payment of consumption coupons, but there are also analyses that the consumption stimulus from the second supplementary budget was only a 'one-off effect.'

Production indicators were unchanged.

Last month, the all-industry production index (seasonally adjusted) was 114.5 (2020=100), the same as the previous month. Industrial production had moved out of the 'negative' in April–May and continued an increase in June–July, but it appears to be pausing again.

Mining and manufacturing production rose 2.4%, supported by favorable automobile production (21.2%), but construction production plunged 6.1%. Facility investment decreased 1.1% from the previous month.

The coincident composite index cyclical component, which shows the current economic situation, rose 0.2 percentage points (p) from the previous month, and the leading composite index cyclical component, which forecasts the future economic phase, rose 0.5 p.

Cha Eun-ji Hankyung.com reporter chachacha@hankyung.com