Service output in eight provinces and major cities increased in the first quarter from a year earlier as production in the in-person service segment improved amid relaxed social distancing rules, data showed Monday.

The country's service output rose 2.2 percent on-year in the January-March period, according to the data compiled by Statistics Korea.

Of 16 provinces and cities, Seoul, three major cities and four provinces posted an on-year rise in service production in the cited period, as the financial, insurance and wholesale and retail sectors improved.

Service output in Seoul -- home to about one-fifth of the country's 52 million population -- rose 6.3 percent in the first quarter on the back of robust gains in the financial sector amid rising housing prices and the bull run on the local stock market.

The southern resort island of Jeju suffered the sharpest decline in service output by declining 6.4 percent on-year.

The country's service sector was hit hard by the COVID-19 pandemic last year as people have refrained from visiting shops to avoid infection risks.

But service output rebounded last quarter as people's economic activities increased amid eased virus curbs and warm weather.

Retail sales in 14 provinces and cities increased, led by sales gains in autos, fuel and other products, the data showed.

Jeju Island also suffered the biggest drop in retail sales with an 8.1 percent on-year fall as demand for duty-free products was dented by the pandemic. (Yonhap)