South Korea’s industrial output turned negative in August as the resurgence of COVID-19 disrupted manufacturing and service activities.
The seasonally adjusted mining and manufacturing output in August fell 0.7 percent from the previous month, reversing from a 1.9 percent gain in July and 7.1 percent jump in June, Statistics Korea reported Tuesday.
Against a year ago, it retreated 3.0 percent, deepening the decline of the previous two months.
Factory operation averaged 69.6 percent in August, down 0.5 percentage point versus a month ago. Inventory levels added 2.1 percent on month and 3.6 percent on year.
The 4.0 percent rise in semiconductor output was not enough to offset the 7.3 percent dip in food products and 4.1 percent fall in automobile production.
“The record-long rainy season dampened demand for summer food items like ice creams and frozen desserts while auto production was impacted by the virus resurgence and adjustment in assembly lines for new models,” said Statistics Korea.
The benchmark Kospi rose 0.86 percent to close Tuesday at 2,327.89. The Korean won gained 0.09 percent, or 1.00, against the U.S. dollar to 1,169.00.
Service output slipped 1.0 percent from the previous month, turning downward for the first time in five months as the hospitality sector took a hard blow from toughened social distancing restrictions.
Accommodations and restaurants plunged 7.9 percent, with wholesale and retail sectors also down 1.5 percent. Finance and insurance sectors grew 3.7 percent.
August retail sales, however, rebounded 3.0 percent after a 6.0 percent fall in the previous month.
Sales of semi-durable goods like clothes declined 4.4 percent. But durable goods like home appliances surged 12.7 percent and non-durable goods like food gained 0.9 percent as the rainy season and virus flare-up prompted more people to spend time at home.
Capital investment sank 4.4 percent from the previous month. Spending in machineries fell 5.8 percent and vessels and other transportation equipment 0.2 percent.
The coincident index, reflecting current economic activities, rose 0.4 point from a month earlier. The leading indicator, a gauge of where the economy is headed, also gained 0.6 point.
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