In August 2025, industrial activity was mixed: output in services (-0.7% m/m; +1.0% y/y) and public administration (-1.1% m/m; -0.1% y/y) declined, while mining & manufacturing output rose sharply (+2.4% m/m; +0.9% y/y). As a result, total industrial production was unchanged m/m (0.0%) and down y/y (−0.3%).

In mining & manufacturing, semiconductors and food products contracted due to inventory adjustment, but automobiles and pharmaceuticals posted large gains—helped in part by base effects from the previous month—so overall output increased. In services, accommodation and food services and professional, scientific and technical services rose, but declines in wholesale and retail trade and in membership organizations, repair and other personal services led to an overall decrease. Retail sales declined: despite higher sales of semi-durable goods such as apparel, sales of durable and non-durable goods fell due to base effects from the previous month. Facility investment decreased as a modest rise in machinery (e.g., precision instruments and semiconductor manufacturing equipment) was outweighed by a sharp drop in transportation equipment (e.g., aircraft and ships). Construction completed decreased as both building and civil engineering contracted. The Composite Coincident Index (CCI, cyclical component) rose as increases in domestic shipments and mining & manufacturing output more than offset declines in imports and construction completed. The Composite Leading Index (CLI, cyclical component) also rose, with stock prices, construction orders, and the long–short interest rate differential all increasing.

While mining & manufacturing output surged in August, retail sales and facility investment—both of which had jumped in July—underwent a correction. Taken together, the July–August results show gains relative to Q2 in total industrial production, retail sales, and facility investment. Based on early (flash) indicators, the uptrend in key industrial activity indicators is expected to resume in September. It will be important to make an all-out effort to stimulate the economy—particularly domestic demand—and to respond effectively to U.S. tariff measures.

‘July exports: growth sustained by market diversification and expanding of hybrid-vehicle sales.’
→ July exports rose 4.3% y/y on strong hybrid-vehicle sales and a more diversified export market mix. June domestic sales increased 5.1% y/y, supported by consumption-boosting policies and higher sales of eco-friendly vehicles. June production returned to y/y growth as both domestic sales and exports increased.

‘Growth moderates amid structural expansion’
→ June production rose 39.3% y/y, marking the fifth consecutive month of growth of around 40%. July exports surged 107.6% y/y, driven by deliveries of high-value-added vessels, including tankers and LNG carriers. June imports increased 54.4% y/y, reflecting greater inflows of foreign-built vessels. As of June, Korea’s order backlog stood at 35.58 million CGT (compensated gross tonnage), securing more than three years of work; however, this year’s sharp drop in new orders raises concerns about the outlook.

‘Production turns down due to weak domestic demand and exports’
→ June production fell 1.7% y/y amid sluggish domestic demand and weak facility investment. July exports decreased 17.2% y/y as the global investment remained subdued. June imports increased 11.5% y/y, reflecting higher machinery order intake.

‘June production edges up; export downturn persists’
→ June production edges 0.6% y/y. Despite weak domestic demand and low operating rates for long products (bars and shapes), output was supported by stronger domestic sales of key flat products, underpinned by stronger exports and a pullback in competing imports. July exports fell 2.9% y/y, reflecting lower shipments to the U.S. amid tariff measures, softer demand in major markets, and lower unit values. June imports declined 6.3% y/y following provisional anti-dumping duties on Chinese and Japanese products and falling prices.

‘July exports down 6.3% as persistently low crude prices depress unit values’
→ June production rose 2.5% y/y as refining margins rebounded, prompting higher domestic refinery utilization rates. July export value fell 6.3% y/y (−USD 290 million) despite higher export volumes, due to lower unit values.

‘July exports declined 17.5% y/y amid reciprocal tariffs’
→ Following a 2023 down-cycle, the smartphone market is expected to enter an upcycle through 2026 with shipments rising; however, base effects from front-loaded exports in H1 and mounting weakness in the entry-level segment are becoming increasingly evident. In June, production and shipments rose 25.5% y/y and 8.7% y/y, respectively; capacity utilization increased 19.3%, while inventories fell 13.1%. June imports rose 11.4% y/y on higher smartphone inflows.

‘Record-high exports for the fourth consecutive month’
→ July exports came to USD 14.7 billion (+31.6% y/y), the highest July on record, marking the fourth consecutive month of record-high exports. In June, semiconductor output increased 6.6% m/m and 16.6% y/y, extending the uptrend.

‘July exports contract despite a higher mix of premium panels, amid unstable end-market demand’
→Despite a higher mix of premium panels, July exports declined 9.0% y/y amid a sluggish recovery in key end-market products. June production fell 21.4% y/y and 18.9% m/m.