In October 2024, South Korea’s industrial activities fell from the previous quarter (△0.3 percent from the previous quarter) due to continued sluggishness of the construction industry (△4.0 percent). On a year-to-year basis, however, the nation’s industrial activities turned positive (2.3 percent) in just one month, thanks to a significant increase in the mining and manufacturing industries (up 6.3 percent year-on-year), including a surge in semiconductor production.

In October, mining and manufacturing production stayed flat (from △0.1 percent to 0.0 percent) as increased semiconductor production made up for the temporary production disruption caused by the strike of car parts manufacturers. The service industry rebounded (from △0.8 percent to 0.3 percent) due to the spread of infectious diseases (e.g., whooping cough), an increase in inbound tourists, and the beginning of the professional winter sports season. Retail sales fell from △0.5 percent to △0.4 percent as sales increased for semi-durable goods (4.1 percent) and non-durable goods (0.6 percent), but decreased for durable goods (△5.8 percent) due to the strike and base effects. Facilities investment was adjusted after a big jump in the previous month, mainly for machinery such as semiconductor equipment. Construction completed fell further (from △0.7 percent to △4.0 percent) as construction and civil sectors shrunk together. The cyclical change in the coincident index stayed flat despite the falling amount of construction completed as the mining and manufacturing index improved. The cyclical change in the leading index fell due to the effect of falling KOSPI and others.

‘September Exports Turned Positive for the First Time in Four Months, Driven by Robust Demand for South Korean Cars from North America’
→September exports ended the three-month decline to grow by 1.8 percent year-on-year, driven by the strong performance of hybrid vehicles and the subsequent increase in the exports of finished vehicles. Domestic demand in August shrunk by 3.3 percent year-on-year as consumption remained sluggish despite the launch of new models. Production in August stayed flat year-on-year, with upside and downside factors offsetting each other.

‘As Production Indices Continued to Improve, the Industry’s Exports and Imports Surged Together’
→In August, the industry’s production, shipments, and capacity utilization rates continued to rise together by double digits. In September, exports surged by 76.2 percent year-on-year as a large number of container ships and LNG carriers were delivered. In August, imports grew by 94.4 percent year-on-year, driven by a significant increase in the imports of ships and ship parts. South Korea continues to win orders for LNG and LPG carriers and tankers, but competition between South Korea and China is intensifying as China wins more orders for high-value-added vessels.

‘Despite Sluggish Production and Exports, the Industry’s Performance Stayed Similar to the Previous Year, Supported by Growing Domestic Demand’
→ In August, the industry’s production remained at the same level as the previous year as exports plummeted even as domestic shipments and facility investment supported the growth of domestic demand. Exports in September declined by 13.3 percent year-on-year, led by falling exports to the US. Imports in August remained at the same level (0.0 percent) as the previous year due to the slow recovery in demand in the upstream industries.

‘Production Continued to Increase Month-on-Month, while Exports Fell Further due to Falling Unit Prices and Intensified Competition’
→ In August, production decreased by 2.2 percent year-on-year due to a contraction in the domestic economy, including a sluggish construction market, but continued to grow month-on-month as exports expanded. In September, exports fell by 3.9 percent year-on-year as exports to major countries slowed, and competition in the global market intensified. Despite the increase in imports of low-end products from China, imports in August declined by 4.1 percent year-on-year, affected by rising import prices and sluggish domestic demand.

‘Despite Increases in Exports and Export Volume, the Industry’s Export Amount Fell by 17.8 percent Year-on-Year due to Falling Unit Prices’
→ In August, production increased by 16.6 percent year-on-year, supported by an increase in domestic demand and export volume and an upward revision of the capacity utilization rate of domestic refining facilities. In September, the industry’s export amount slid by 17.8 percent year-on-year as oil prices plummeted by 21.1 percent.

‘September Exports Increased by 19 percent to Grow for Seven Straight Months, Supported by the Expansion of the Global Smartphone Market’
→ September exports increased by 19 percent year-on-year, with exports of mobile phone parts - the country’s main export product—increasing by a significant 24.8 percent as global smartphone makers increased production. In August, production increased by 26.2 percent year-on-year, and shipments also increased by 0.5 percent. However, inventories jumped by 99.8 percent as consumers postpone purchase and wait for the launch of a new flagship product scheduled for launch in the fourth quarter. August imports declined by 16.4 percent year-on-year due to falling imports of smartphones and parts.

‘Monthly Exports Hit Record High in Three Months’
→ September exports reached USD 13.6 billion, a 37.1 percent increase from the same month last year, setting a new record. The semiconductor production index in August recorded 161.8, up 10.3 percent year-on-year, and turned positive again from the previous month.

‘Exports Down and Inventories Up due to Strong Performance in the Previous Year and Intensified Global Competition’
→ In August, production fell by 2.8 percent year-on-year, while the capacity utilization rate rose by 4.5 percent. In September, exports decreased by 4.3 percent year-on-year, affected by the impact of strong performance in the previous year, while new demand continued with the launch of new IT products.