This photo taken Nov. 21, 2023, shows a port in South Korea’s southern city of Busan. (Image courtesy of Yonhap)
SEOUL, Jan. 31 (Korea Bizwire) — South Korea’s output from the manufacturing sector fell by the most in 25 years in 2023 due mainly to weak demand for semiconductors amid an industry downcycle, data showed Wednesday.
Retail sales and investment also tumbled last year amid high interest rates and inflationary pressure, and concerns linger over weak domestic demand.
The overall industrial output gained 0.7 percent in 2023 from a year earlier, the third straight on-year increase, though the growth slowed down from a 4.6 percent expansion in 2022.
Last year’s increase came as the output from the service sector advanced 2.9 percent on-year.
But the production in the manufacturing sector tumbled 3.9 percent, the largest on-year fall since 1998, when the figure came to 6.5 percent. South Korea suffered the Asian financial crisis in 1997-98.
The decrease was mainly attributable to weak demand for semiconductors. The chip output shed 5.3 percent in 2023, marking the first on-year decline since 2001.
Retail sales, a gauge of private spending, fell 1.4 percent on-year last year, as sales of food and other non-durable goods lost ground amid high inflationary pressure.
It was the largest on-year fall since 2003, when the figure came to 3.2 percent.
Facility investment also tumbled 5.5 percent in 2023 amid a real estate market slump, compared with a 3.3 percent on-year gain the previous year.
It was the sharpest fall in four years, the data showed.
In December alone, industrial output rose 0.3 percent on-month, the second monthly gains.
Compared with a year earlier, the production climbed 1.1 percent as the semiconductor sector logged a 53.3 percent increase in output on rising demand.
The semiconductor industry has shown signs of a turnaround since around the second half of last year.
Retail sales, however, fell 0.8 percent on-month in December. From a year earlier, sales shed 2.2 percent.
Facility investment rose 5.5 percent on-month, but the figure marked a 5.9 percent decrease in an on-year term, the data showed.
In 2023, the South Korean economy grew 1.4 percent last year, slowing from a 2.6 percent expansion the previous year.
(Yonhap)
