Manufacturing, Services, Construction Investment

and Facilities Investment Up, Retail Sales Down

Manufacturing, services, construction investment and facility investment rose in May while retail sales declined. Employment continued to increase in June and consumer prices rose at a faster pace.

Industrial production increased by 0.8 percent from the previous month in May as manufacturing (up 0.1%, m-o-m and up 7.3%, y-o-y) rose and services (up 1.1%, m-o-m and up 7.5%, y-o-y) went up.

Facilities investment (up 13.0%, m-o-m and up 5.1%, y-o-y) and construction investment (up 5.9%, m-o-m and up 8.2%, y-o-y) increased while retail sales (down 0.1%, m-o-m and up 0.7%, y-o-y) declined in May.

Exports rose by 5.2 percent year-on-year in June led by semiconductors and petroleum products. Average daily exports increased by 14.8 percent from a year ago to US $2.62 billion in June 2022 from US $2.28 billion in June 2021.

The consumer sentiment index (CSI) declined by 6.2 points in June to 96.4 from the previous month. The business survey index (BSI) for the manufacturing sector also went down by 3 points to 83, and the BSI outlook for July 2022 decreased by 4 points to 83.

The cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index for May rose by 0.1 points and 0.1 points, respectively.

The economy added 841,000 jobs year-on-year in June and the unemployment rate fell by 0.8 percentage points from a year ago to 3.0 percent.

The consumer prices grew by 6.0 percent year-on-year in June due to higher increases in petroleum product prices and the core inflation rose by 4.4 percent.

Stock prices dropped in June out of continued concerns for major economies’ tight monetary policies such as U.S. interest rate hikes caused by global inflationary pressure while Korean treasury yields picked up and the won became weaker.

Housing prices growth turned negative in June (0.01% → -0.01%, m-o-m), and prices of Jeonse (lump-sum deposits with no monthly payments) also turned lower (0.00% → -0.02%, m-o-m).

While the economy has continued to gradually improve due to recovery in employment and in-person service industries, concerns remain that higher inflation caused by external factors and the potential to drag on export recovery could slow down the economy.  

Internationally, with global inflationary pressure continuously rising, financial market volatility lingers and global economic downside risks are higher due to major economies’ rapid interest rate increases, China’s economic slowdowns and the prolonged Russia-Ukraine war.   

The government will make its utmost efforts to stabilize prices and people’s livelihood, address economic challenges and manage risks by taking rapid actions to overcome low growth and creating a virtuous cycle of growth and welfare. 

Please refer to_MOEF Press Release_ Current Economic Situation_ July 2022.pdf.