South Korea’s industrial output flat in July as consumption falls and investment rises

South Korea’s industrial production stalled in July, while consumer spending weakened and facility investment extended its recent rise.

The all-industry production index stood at 120.2 on a seasonally adjusted basis, unchanged from June. Production had declined in April and May before jumping 2.4% in June, making July’s flat reading partly a reflection of the previous month’s sharp increase.

Mining and manufacturing output edged up 0.2%. Electronic components rose 20.7%, primary metals gained 4.2% and semiconductor production increased 0.5%. Automobile output fell 4.5%, with the decline linked largely to a base effect after production had surged in June as a parts factory fire in Daejeon returned to normal operations.

Retail sales dropped 2.4% from the previous month. Durable goods sales fell 7.7%, semi-durable goods declined 1.4% and nondurable goods slipped 0.1%. Passenger-car sales fell 11.1%, the steepest decline since January 2024, after demand had been pulled forward by the end of a tax cut on individual consumption.

Facility investment increased 7.5%, following a 6.9% rise in June. Transport equipment investment climbed 15.4% because of aircraft and ship acquisitions, while investment in machinery, including semiconductor manufacturing equipment, rose 4.2%. Construction completed fell 1.1%. The coincident economic index rose 0.8 points, and the leading index increased 0.4 points.