In October, production in all industries declined the most in 5 years and 8 months. The underlying effects of the strong performance of semiconductors in the previous month, where the global boom continues, and the impact of the long Chuseok holiday were reflected.
According to the “October Industrial Activity Trend” published by the National Data Service on the 28th, the total industrial production index last month was 112.9 (2020 = 100), down 2.5% from the previous month. This is the biggest decline since February 2020 (-2.9%).
Industrial production declined from April to May of this year and turned up from June to July. Since then, the trend has continued to rise and fall from month to month, with a decrease of 0.3% in August and an increase of 1.3% in September.
In particular, semiconductor production plummeted 26.5% in October, the biggest decline in 43 years since October 1982 (-33.3%). This is an assessment that the semiconductor boom is still strong due to a temporary underlying effect of a 19.8% increase in semiconductor production in September compared to the previous month.
The market still has a positive outlook on the global semiconductor industry. Market research firm Gartner proposed a growth rate of 33.4% for the global DRAM market this year based on the September forecast, an increase of 9.2 percentage points compared to the June forecast (24.2%). An official from the Ministry of Planning and Finance explained, “It is difficult to believe that the semiconductor industry has declined in principle, and it is likely to increase as October and November pass.” Overall mining industry production declined by 4.0%, but excluding semiconductors, it increased by 1.1%.
Equipment investment decreased by 14.1% compared to the previous month. Investments in machinery such as machinery for semiconductor manufacturing (-12.2%) and transportation equipment such as automobiles (-18.4%) both declined. Construction performance decreased by 20.9% compared to the previous month due to a decrease in construction performance in both construction (-23.0%) and civil engineering (-15.1%). This is the biggest decline since the statistics were compiled in July 1997. A data source official said, “Overall, the construction industry was not good, and the number of working days seems to have decreased a lot due to long holidays and jinggeumdari holidays.”
Consumption showed signs of recovery. After showing a decline in August and September, the retail sales index increased by 3.5% compared to the previous month in October, the biggest increase in 2 years and 8 months since February 2023 (6.1%). Sales of durable goods such as passenger cars (-4.9%) declined as the number of business days declined due to the impact of the Chuseok holiday, but non-durable goods such as food and beverages (7.0%) increased significantly. Sales of semi-durable goods such as clothing (5.1%) also increased due to the chilly weather. On the other hand, service production, which represents consumption in the service industry, declined by 0.6% and turned into a decline in just one month.
The Registry stated that “it is a policy to strengthen policy efforts so that growth momentum can continue and spread,” and “we will continue to promote expedited financial execution and an additional 3 trillion won of investment in public institutions without a hitch.”
? From the “semiconductor base” to the Chuseok holiday... production in all industries plummeted in October
