South Korea November factory output falls most in 10 months on poor exports

Workers loading containers onto trucks at a terminal in Uiwang, south of Seoul, in 2010.
Workers loading containers onto trucks at a terminal in Uiwang, south of Seoul, in 2010. PHOTO: REUTERS

SEOUL (REUTERS) - South Korea's industrial output posted its worst decline in 10 months in November as slumping global demand hurt exports while services managed to provide some relief as consumption recovered, data showed on Wednesday (Dec 30).

Factory output in November fell a seasonally-adjusted 2.1 per cent from a month earlier, according to Statistics Korea. A Reuters survey had projected a 0.5 per cent decline, and October's drop was revised to 1.3 per cent.

November's fall was the worst since January, led by semiconductors and communications equipment, the data showed. A senior Finance Ministry official attributed the gloomy data to weak exports and called external conditions "bad".

"Manufacturing in the fourth quarter will likely turn out to be worse than the third, as there is no hope in sight for exports - there is much riding on domestic demand at the moment," said Mr Huh Jae Hwan, economist at KDB Daewoo Securities.

Reflecting soft activity, factories on average used only 72.7 per cent of their operating capacity in November, the lowest figure since April 2009.

On an annual basis, industrial output fell 0.3 per cent in November, compared with a 1.7 per cent increase tipped in the Reuters survey. October output was revised to a 1.7 per cent annual gain.

Wednesday's data on services provided some hope for growth. Service-sector output rose for a fifth straight month by a seasonally adjusted 0.1 per cent from October, whose gain was revised to 0.4 per cent from a preliminary 0.2 per cent.

This was the longest rising streak for services since early 2011.

President Park Geun Hye urged government officials this week to come up with strong measures to keep consumption from lagging in early 2016 as exports are expected to remain weak.

December export data will be released on Jan 1 and is expected to have fallen for a 12th consecutive month in annual terms, according to a Reuters poll.