South Korea's industrial output unexpectedly dropped on-month in October on weak exports, a government report showed Monday, a turnaround from the previous month's gain that points to the sputtering recovery of Asia's fourth-largest economy.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries fell 1.4 percent on-month in October, compared with a 2.2 percent on-month gain in September.

It is the sharpest on-month fall since the 1.6 percent decline reported for May and follows two straight months of gains.

Compared with a year earlier, industrial production also declined 1.3 percent. This is also the poorest showing after numbers dropped 1.9 percent in January.

"South Korea's exports nosedived 15.9 percent in October, which affected overseas shipments of autos and chemical products," said Choi Jung-su, director of the short-term industrial statistics division. In the cited month, exports by Asia's fourth-largest economy reached US$43.42 billion, vis-a-vis $51.63 billion from a year earlier. 

Output of automobiles, which includes car parts, were down 2.8 percent, while chemicals were off by 4 percent from the month before. Such losses offset gains in metal products, and communication and broadcasting equipment, which rose 3.6 percent and 7.8 percent, respectively.

Reflecting this, the operational rate of the country's manufacturing sector was down 1.4 percentage points to 73.8 percent.

Production in the service sector, a key part of the economy, managed to rise 0.2 percent from the previous month and moved up

3.1 percent from a year earlier, the report showed.

The statistical agency said the monthly gain was helped by the 1.9 percent increase in the wholesale and retail sector, and real estate transactions that advanced 2.1 percent.

"Private spending did alright for the month," Choi said.

Overall private spending moved up 3.1 percent on-month, from 0.7 percent tallied for September, and shot up 8.3 percent compared to the year before.

Construction, another key part of output, was down a sharp 7.8 percent on-month as public civil engineering projects dried up, although compared with the year before numbers rose 3.9 percent.

Business investment was down 0.8 percent as less money was injected into the transportation equipment sector.

For all industries, which include the service and construction sectors, output was down 1.3 percent from the previous month but rose 2.4 percent from a year earlier.

The latest on-month drop comes after output for all industries rose from June to September on a monthly basis.

The statistical agency said the service sector cushioned the fall for all industries, although it wasn't enough to counter the overall drop in outbound shipments and weak construction sector numbers.

The finance ministry said domestic consumption is continuing to do well, but exports were weighing down output.

"Retail sales, helped by nationwide discount events and excise tax benefits helped output," it said. The ministry pointed out that consumer sentiment has been moving up five straight months as of October.

On the other hand, the ministry in charge of formulating the country's economic policy said a slowdown in the Chinese economy and the Paris terrorist attack are affecting industrial output and investment growth.

For the future, the ministry said it aims to inject the remainder of the 9 trillion won ($7.7 billion) in funds set aside to vitalize the economy before the end of the year, and keep close tabs on overseas development like the expected rise in U.S. interest rates.

"The government will do its best to push forward key reforms in the labor, financial, public sectors and education and try to bolster growth by helping companies export more goods abroad," the ministry said. (Yonhap)