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Korea's industrial output gains in June, but facility investment falls for fourth consecutive month

Published: 31 Jul. 2025, 13:03 Updated: 31 Jul. 2025, 17:40

Export vehicles are parked at Pyeongtaek Port in Pyeongtaek, Gyeonggi on July 31. [NEWS1]

Korea’s industrial output rose in June on gains in autos, semiconductors and consumer goods, but facility investment fell for a fourth straight month, signaling mixed momentum in the economy.

All-industry production excluding agriculture rose 1.2 percent from May, reaching 113.8 on the seasonally adjusted index, Statistics Korea said Thursday. The index had declined for two straight months before rebounding in June.

Manufacturing output rose 1.7 percent, helping overall mining and manufacturing output increase 1.6 percent. Semiconductors jumped 6.6 percent, while automobiles rose 4.2 percent and fabricated metal products increased 4.7 percent.

But output of electronic components plunged 18.9 percent, the sharpest drop since December 2008. Statistics Korea attributed the decline to weak smartphone demand and trade-related uncertainty from U.S. tariffs, which reduced demand for OLED panels and LCD polarizing films for mobile devices.

Shipments in manufacturing increased 1.8 percent as gains in semiconductors and petroleum products offset drops in electronics and pharmaceuticals. Domestic shipments of automobiles rose 4.1 percent, while exports increased 1.7 percent.

Consumption indicators also improved. Service industry output rose 0.5 percent on the back of gains in finance, insurance and professional services.

The retail sales index rose 0.5 percent from May, ending a three-month decline. Sales of cars dropped 1.6 percent, but clothing rose by 4.1 percent and cosmetics also increased by 0.3 percent.

Although consumer coupons — issued by the Lee Jae Myung administration earlier this year to encourage domestic spending — were not reflected in the June data, Statistics Korea noted signs of improving consumer sentiment starting in May.

Facility investment fell 3.7 percent from May due to a decline in the transportation equipment sector, marking the fourth consecutive monthly drop and the longest stretch since 2018. But investment rose year-on-year for the fifth straight month, indicating that overall levels are not considered low.

Completed construction work, adjusted for inflation, rose 6.7 percent in June, rebounding after four months. Building construction rose 10.3 percent, while civil engineering fell 2.8 percent.

But construction output has declined year-on-year for 14 consecutive months, leading Statistics Korea to conclude that it is still too early to say the sector is recovering.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY JEONG JAE-HONG [[email protected]]