South Korea’s industrial output growth dropped sharply in March from the previous month mainly due to weak exports and domestic demand, a government report showed Monday.
Production in the mining and manufacturing industries edged up 0.3 percent last month from a year earlier, compared with a 14.3 percent on-year increase in February, according to the report by Statistics Korea
The monthly output number represents a 3.1 percent contraction from February.
In the manufacturing sector, which makes up the bulk of all the industrial output in the country, output moved up just 0.3 percent from a year earlier but fell 3.4 percent from February, the report said.
The country’s service sector output grew 1.4 percent on-year last month, with the average operating rate of manufacturers standing at 78.2 percent, down from 81.1 percent in February.
The report also showed South Korea’s overall output in manufacturing, mining and services inching up 0.2 percent from a year earlier and falling 1.4 percent from the previous month.
“Lackluster exports and a 3.7 percent contraction in domestic demand hurt industrial production,” said Jeon Baek-geun, a director at the statistical agency.
The country’s exports reached $47.38 billion last month, a 2.2 percent gain from February but a 1.4 percent contraction from March 2011.
He said weak outbound shipments were caused by a sluggish global economic recovery that adversely affected audio and video, and machinery exports to drop 14.9 percent and 4.0 percent, respectively. Semiconductor and auto output posted gains of 7.2 percent and 8.3 percent, each.
In the service sector, retail production remained flat from a year earlier with facility investments moving up a mere 1 percent on-year, down from a 23.8 percent gain tallied a month earlier.
Reflecting overall weakness in industrial output, orders for new machinery, a key barometer of future growth, plunged 26 percent from a year earlier. Construction orders were down 3.5 percent with actual building falling 7.9 percent on-year, according to the report.
