Semiconductor production declined for the first time in three months due to reduced output of DRAM and system semiconductors, pushing overall industrial production down 1.3%. Retail sales and facility investment increased, showing mixed signals across economic indicators.
According to the "January Industrial Activity Trends" released by the National Data Agency on March 4, the seasonally adjusted all-industry production index stood at 114.7 (2020=100) last month, down 1.3% from the previous month. Industrial production had risen for two consecutive months prior, gaining 0.7% in November and 1.0% in December following a 2.2% decline in October last year.
The decline in semiconductor output was the primary driver behind the industrial production drop. While electronic components production rose 6.5%, semiconductors fell 4.4% and other transportation equipment including oil tankers dropped 17.8%. As a result, mining and manufacturing production decreased 1.9%.
"Semiconductor production declined due to reduced DRAM and system semiconductor output, while production of oil tankers and container ships also decreased," a National Data Agency official explained.
The retail sales index, which tracks consumer spending trends, rose 2.3% from the previous month. This marks the second consecutive monthly increase following December's 0.6% gain, indicating a solid recovery trend.
The facility investment index, which measures investment in equipment supplied domestically, jumped 6.8% month-over-month. This marks the first positive reading in four months since September's 8.1% increase last year.
Investment grew in both transportation equipment including automobiles (15.1%) and machinery including semiconductor manufacturing equipment (4.0%). Investment in semiconductor manufacturing equipment surged 41.1%.
Construction completed, an indicator showing domestic construction performance by value in real terms, fell 11.3%.
The cyclical component of the coincident composite index, which reflects current economic conditions, remained flat. The cyclical component of the leading composite index, which signals future economic trends, rose 0.7 points from the previous month.