South Korea’s economy showed mixed trends as industrial output and retail sales increased, while facility investment declined again. According to new data, industrial production rose 1.2 percent month-on-month. This growth came mainly from stronger activity in semiconductor and automobile manufacturing.
Semiconductor production climbed 6.6 percent due to increased output of DRAM and system chips. At the same time, automobile output grew 4.2 percent, boosted by more compact car production and new auto parts. However, electronic component output dropped sharply by 18.9 percent.
Meanwhile, the retail sector also posted moderate growth. Retail sales rose 0.5 percent, driven by solid demand for clothing and cosmetics. In detail, sales of semidurable goods like apparel increased 4.1 percent. Additionally, sales of nondurable goods, including cosmetics, edged up 0.3 percent.
Despite these gains, durable goods such as home appliances recorded a 1.6 percent decline. Retail performance overall reflected cautious optimism among consumers. This was especially visible in fashion and beauty-related categories.
On the other hand, facility investment continued to shrink. It fell 3.7 percent from the previous month, marking the fourth consecutive decline. This trend raised concern about long-term capital growth.
The only bright spot came from machinery used in semiconductor production. That segment posted a 1.7 percent monthly gain, showing some industry-specific strength. However, transport equipment investment dropped a steep 14.8 percent.
The current weakness in capital investment followed a major spike earlier this year. A sharp increase in February created a base effect that distorts short-term readings. As a result, monthly figures now show a downward path.
However, on a yearly basis, overall facility investment has risen for five straight months. This long-term trend points to underlying stability in business spending. Even with short-term declines, officials believe the investment level remains reasonably strong.
Still, the mixed data highlight economic uncertainty. While industrial output gains suggest resilience, falling investment signals possible hesitation among companies. For now, South Korea must rely on strong sectors like semiconductors to balance weaker areas.
As global and domestic challenges continue, consumer sentiment plays a key role. Sustained growth in clothing and cosmetics shows that spending patterns remain active in certain categories.
