The maximum in 8 months… Coronavirus recovery
Maximum in 10 years of business experience
Consumption and facility investment declined and turned around
The Korean economy is gradually escaping the impact of the novel coronavirus infection (Corona 19). In February, industrial production increased to the maximum in eight months, recovering to pre-Corona 19 levels.
As exports continued to rise, mainly semiconductors, both the import and export volume index reached a record high. Thanks to strong exports, the economic indicators experienced by companies also jumped to the highest level within 10 years.
According to the industrial activity trend released by the National Statistical Office on the 31st, all industrial production in February (excluding seasonal adjustment and agriculture, forestry and fishing) increased 2.1% from the previous month. This is the largest increase since June last year (3.9%). As an index, it recorded 111.6 (2015 = 100), the highest since January 2000, when statistics began, and recovered to the level in December 2019 (111.5) before Corona 19.
The production of semiconductors (7.2%) increased, and the production of chemical products (7.9%) also showed good performance. Production in the service sector increased 1.1%, breaking from the decline that lasted for two months in a row. In particular, the production of lodgings and restaurants surged 20.4%.
Both imports and exports continued to increase. According to the’February 2021 Trade Index and Terms of Trade’ (provisional) announced by the Bank of Korea on that day, the export volume index rose 4.2% from the same month last year to 109.26, rising for six consecutive months since last September. As of February, the record was the highest since the statistics were written in January 1988.
An official from the BOK explained, “The export volume index in February rose due to increased demand for semiconductors due to the recovery of automobile demand in major countries, strengthening of non-face-to-face businesses related to Corona 19, and increasing demand for products related to home economy (in-home consumption).”
The export price index in February recorded 107.50, a 10.4% increase from a year ago, mainly on chemical products (22.5%), computers, electronic and optical devices (11.9%), driven by rising international oil prices and strong sales of high-priced smartphones. This, too, has risen for four consecutive months, and is the highest all-time as of February every year. In February, the import volume index (113.23) and the import price index (117.76) rose 15.7% and 15.1%, respectively, compared to the same month last year.
As both industrial production and exports showed good performance, the company’s sense of experience jumped significantly. According to the results of the March Business Economic Survey (BSI) survey released by the Bank of Korea, the BSI of the business conditions reflecting all industries was 83, up 7 points from February 76. This is the highest figure since July 2011 (87).
However, retail sales in February, which shows consumption trends, declined 0.8% compared to the previous month. It has declined again in three months since last November (-0.3%). Sales of durable goods such as communication devices and computers also decreased by 1.7%. Facility investment also declined 2.5%, turning back to a decline in four months since last year’s October (-5.0%).
Reporter Nam Jung-hoon, reporter Sejong=Woo Sang-gyu [email protected]
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