Vehicles waiting for export. (Image courtesy of Yonhap)
SEOUL, May 30 (Korea Bizwire) — South Korea’s economy showed renewed signs of weakness in April, with industrial production, consumption, and investment all posting declines — the first “triple minus” since January — as the impact of new U.S. auto tariffs begins to ripple through key sectors.
According to data released Friday by Statistics Korea, overall industrial output fell 0.8% from the previous month, reversing a brief rebound and signaling deepening headwinds in both domestic and export-driven segments. Production dropped across all major sectors, including public administration, manufacturing, services, and construction.
The manufacturing sector contracted 0.9%, driven by a 4.2% drop in automobile output and a 2.9% fall in semiconductor production. This marked the first decline in auto output since November 2024.
Analysts attributed the sharp decline to the 25% tariff the United States began imposing on foreign vehicles in early April 2025 under former President Donald Trump’s trade policy.
“Production of complete vehicles, particularly eco-friendly and specialty-purpose models, has slowed,” said Lee Doo-won, senior official at Statistics Korea. He noted that Hyundai’s new Georgia-based Metaplant America, which began full-scale production in March, may also be diverting volume from domestic manufacturing lines.
Domestic demand indicators also remained in the red. Service output dipped 0.1% for the second consecutive month, dragged down by weak performance in professional, scientific, and financial sectors despite gains in retail and wholesale.
Underwhelming Q1 results of leading food enterprises. (Image courtesy of Yonhap)
Retail sales — a measure of goods consumption — fell 0.9%, reflecting declines across all categories: semi-durable goods such as clothing (-2.0%), durable goods (-1.4%), and non-durable items (-0.3%). This marked the second month of contraction after a 1.0% drop in March.
Facility investment also slipped 0.4%, extending its downward trend. While investment in transportation equipment surged 9.9%, machinery investment — including semiconductor equipment — fell 4.5%. Construction output declined 0.7%, as growth in civil engineering (+6.6%) was outweighed by a 3.1% drop in building construction.
Despite the weak showing across core metrics, the broader business cycle indicators painted a more resilient picture. The coincident composite index, which reflects current economic conditions, rose 0.2 points, while the leading index, a gauge of future activity, climbed 0.3 points.
Lee acknowledged that the April figures reflect “rising uncertainty at home and abroad, delayed consumer recovery, and persistent weakness in construction,” compounded by the growing burden of U.S. protectionist measures.
M. H. Lee (mhlee@koreabizwire.com)
