South Korea's industrial output declined the most in 11 months in April as production in the chipmaking industry slumped due largely to a higher base effect, data showed Monday.

But the country's service output and retail sales extended their gains last month as warm weather and eased social distancing rules spurred consumer spending.

The industrial output decreased 1.1 percent in April from the previous month, a turnaround from a 0.9 percent on-month increase in March, according to the data compiled by Statistics Korea.

Industrial output declined last month following the second straight month of gains. The reading also marked the largest on-month decline since May last year, when industrial production dropped 1.5 percent.

From a year earlier, it rose 8.8 percent.

The decline in industry output came as production in the manufacturing sector dipped, led by a fall in production in the chipmaking industry.

Production in the semiconductor industry fell 10.9 percent on-month in April, the sharpest decline since April last year.

But service output rose for the third straight month in April, led by an increase in production in the in-person service segments.

Service production gained 0.4 percent on-month last month, following a 1.3 percent on-month increase in March.

Retail sales, a gauge of private spending, grew for the second consecutive month in April as people increased outdoor activity amid warm weather and eased distancing rules.

Retail sales increased 2.3 percent from a month earlier, compared with a 2.3 percent on-month gain in March, the data showed.

The index gauging retail sales came to 120.5 in April, the highest since the statistics agency began compiling related data in 1995.

"The COVID-19 vaccine rollout helped improve consumer sentiment and retail sales continued to increase on the back of measures to boost consumption," Eo Woon-sun, a senior Statistics Korea official, told reporters.

He said the South Korean economy extended overall recovery momentum last month as service output and retail sales posted robust growth despite a fall in manufacturing output.

The face-to-face service sector, including the accommodation and hospitality segments, was hard hit by the pandemic as people refrained from visiting offline shops amid concerns about infection risks.

But amid warm weather, pent-up demand and relaxed virus curbs have prompted more people to increase spending in recent months.

The finance ministry earlier said domestic demand is gradually improving as a slump in the service sector caused by the pandemic has eased.

The South Korean economy is recovering from the pandemic as exports of chips and autos, key items, remained solid amid the global economic recovery.

Asia's fourth-largest economy grew 1.6 percent in the first quarter from three months earlier, accelerating from a 1.2 percent on-quarter gain in the fourth quarter of last year, according to the Bank of Korea (BOK). It contracted 1 percent last year due to the new coronavirus outbreak.

Exports, which account for half of the country's economy, jumped 41.1 percent on-year in April to extend their gains for six months.

The BOK revised up its 2021 growth outlook for the South Korean economy to 4 percent last week, up from its earlier estimate of 3 percent. (Yonhap)