The index of all industry production in November 2022 increased slightly, supported by the rebound of public administration and mining and manufacturing industries. On the expenditure side, consumption indicators declined for three straight months while those of construction and equipment investment increased.

In November, production in mining and manufacturing industries declined mainly in semiconductors, but rose by 0.4 percent supported by the rebound of auto, mechanical equipment, and primary metals. Production in the service industry fell by 0.6 percent as the Itaewon crowd crush and the refusal of the truckers' union to transport goods dampened the overall face-to-face service industry. In addition, retail sales fell by 1.8 percent, showing weak performance in all areas of durable, semi-durable, and non-durable goods. In contrast, facility investment saw an increase of 1.0 percent despite the declining investment in transportation equipment, as the introduction of semiconductor equipment boosted investment in machinery. Despite the deteriorating performance of plant-related civil engineering projects, construction investment increased by 1.4 percent, driven by the increase in construction projects related to the reconstruction of apartment buildings and the rebuilding of data centers damaged by fire. The cycle variation value of the coincident composite index fell by 0.7 percentage points due to deteriorating production indicators, and the cycle variation value of the leading index decreased by 0.2 percentage points by reflecting weakening economic sentiment and other factors.

As the slowdown of the global economy, the downturn of the semiconductor industry, and rising interest rates burden export and investment conditions, uncertainties in the economic trend are growing due to the restricted recovery of domestic consumption. On the production side, the continued decline in exports, accumulated semiconductor inventories, and the aftermath of the refusal of the truckers' union to transport goods will pose a burden in the future, despite positive factors such as the resolution of supply chain disruptions and China's easing of quarantine measures. With regard to consumption and investment, risk factors including the downturn of semiconductor and real estate industries, high inflation, and uncertainties in major economies' monetary tightening exist alongside positive factors such as the growth of foreign tourists.

Domestic consumption and exports both posted high growth for three straight months
In October 2022, production increased by 22.8 percent year-on-year and grew for six straight months, supported by the easing of supply chain disruptions and the base effect in the previous year. Despite the economic downturn, domestic demand in November rose by 9.1 percent from a year ago as the resolution of difficulties in sourcing parts boosted supply. In November, exports grew by 21.7 percent year-on-year as more cars were exported to the United States and the Middle East. Exports of finished cars increased by 31.0 percent to record double-digit growth for the fifth consecutive month, driven by exports to the US and the Middle East and exports of EVs. Exports of automotive parts also gained for five months in a row as increased overseas production boosted the exports to the US and the EU.

Production indicators recovered as imports increased and exports plunged
Cumulative global ship orders in October 2022 plunged by 21 percent year-on-year, whereas those of Korea fell by 1 percent year-on-year as more orders were won than expected, including Qatar’s order of multiple LNG carriers and container ships. Imports in October increased by 11.8 percent year-on-year as more cargo ships and ship parts and less ship engines were imported. Exports in November fell by 68.2 percent from a year ago due to the reverse base effect of having exported high-end FLNGs to Mozambique in the same period of the previous year and a decrease in ship deliveries.

Production sustained the upward trend, but exports continued to decline due to worsening performance of exports to China
Despite the continuation of sluggish exports, production in October 2022 rose by 5.7 percent year-on-year, backed by a dramatic increase in domestic demand. Production increased for three straight months since August, with domestic shipments and facility investment posting double-digit growth. Imports in October fell by 1.0 percent year-on-year to USD 2.52 billion. Exports in November dropped by 1.7 percent from the same period of the previous year in the wake of China’s sluggish demand for machinery. However, exports to advanced countries such as the US and Europe fared well as those regions invested in improving infrastructure and required new purchases or replacement of machinery.

Month-on-month production recovered slightly while export unit prices continued to decline
In October 2022, steel production fell by 24.6 percent year-on-year due to the sluggish recovery of demand, continued production disruptions caused by the damages of typhoons, and labor union strikes, but the decline was slower than the previous month. Exports in November declined by 10.6 percent from a year ago as the beginning of the winter off-season dampened global demand and the unit prices of major export items fell. Imports in October decreased by 20.9 percent year-on-year due to sluggish domestic consumption and falling unit prices.

Export unit prices and exports up, driven by continued high oil prices and high refining margins
In October 2022, production increased only slightly year-on-year due to the poor performance of both domestic demand and exports. Exports in November rose by 26.0 percent from a year ago to USD 4.88 billion, as demand for alternative fuels in the winter season increased due to the war in Ukraine and as global demand led by aviation fuel continued recovery.

Global demand for smartphones on a downward trend due to the sluggish global economy
Production in October 2022 grew by 24.6 percent year-on-year, and shipments also increased by 21.0 percent, signaling a recovery in demand for mobile phones after the fourth quarter. In October, the number of mobile phone subscribers in Korea increased slightly by 3.2 percent year-on-year and 0.1 percent month-on-month. Imports in October rose by 7.8 percent from a year ago, mainly for mobile phones, wireless switches and repeaters. In contrast, exports declined by 18.7 percent in November, mainly in China, Southeast Asia, and the US.

Semiconductor exports decreased at a faster pace
In October 2022, semiconductor production fell by 2.2 percent year-on-year, but shipments grew by 18.6 percent from a year ago to begin the upward trend. Exports in November dropped by 29.8 percent year-on-year to stand at USD 8.45 billion, declining for four consecutive months after the end of a long-term rally. With the sluggish global economy dampening demand for semiconductors and accumulated inventories continuing to weaken unit prices, the outlook for exports appears uncertain.

Exports continue to decline due to stalling demand and base effect
In October 2022, production continued to decline due to diminished demands for major products. Imports decreased by 17.2 percent in October, driven by declining smartphone inventories. In November, exports decreased by 15.6 percent to sustain the downward trend for six straight months as less OLEDs and LCDs were produced due to reduced smartphone production.