Current Economic Situation, August 2022

Manufacturing, Facilities Investment UP, Services, Retail Sales, Construction Investment Down

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

Industrial production increased by 0.6 percent from the previous month in June as manufacturing (up 1.9%, m-o-m and up 1.4%, y-o-y) rose and services (down 0.3%, m-o-m and up 3.9%, y-o-y) went down.

Facilities investment (up 4.1%, m-o-m and down 0.7%, y-o-y) increased while retail sales (down 0.9%, m-o-m and down 1.5%, y-o-y) and construction investment (down 2.0%, m-o-m and up 1.8%, y-o-y) declined in June.

Exports rose by 9.2 percent year-on-year in July led by petroleum products and vessels. Average daily exports increased by 13.9 percent from a year ago to US $2.58 billion in July 2022 from US $2.26 billion in July 2021.

The consumer sentiment index (CSI) declined by 10.4 points in July to 86.0 from the previous month. The business survey index (BSI) for the entire sector also went down by 2 points to 80, and the BSI outlook for August 2022 decreased by 3 points to 79.

The cyclical indicator of the coincident composite index and the cyclical indicator of the leading composite index for June showed a steady tone, rising 0.2 points and 0.0 points, respectively.

The economy added 826,000 jobs year-on-year in July and the unemployment rate fell by 0.3 percentage points from a year ago to 2.9 percent.

The consumer prices grew by 6.3 percent year-on-year in July due to higher increases in agricultural, livestock and fishery product prices and the core inflation rose by 4.5 percent.

Stock prices grew in July due to some easing of volatility in the global financial market while Korean treasury yields fell and the won’s depreciation eased.

Housing prices decline is faster in July (-0.01% → -0.08%, m-o-m), and prices of Jeonse (lump-sum deposits with no monthly payments) also saw a faster decline (-0.02% → -0.08%, m-o-m).

While the economy has continued to improve gradually due to recovery in employment and in-person service industries, amid continued high inflation and declines in some indicators of economic sentiment caused by external factors, there are concerns of economic slowdown such as a drag on export recovery in the future.  

Internationally, although volatility in the global financial market is somewhat reduced, with global inflationary pressure continuously rising, global economic downside risks are higher due to major economies’ interest rate increases, U.S. and China’s economic slowdowns and the prolonged Russia-Ukraine war.   

The government will make its utmost efforts to stabilize prices and people’s livelihood especially ahead of Chuseok holiday, help recover from devastation caused by torrential rains, reinvigorate the private sector activities and manage risks by rapidly taking actions to address reformatory challenges for each sector.

Key Statistics

Employment

Consumer Price Index

                                                                                         (%)

Mining, Manufacturing, Electricity and Gas Production

                (Percentage change from the previous period, %)

1. Preliminary

2. Mining, Manufacturing, Electricity and Gas Production

3. End-point (month, quarter, and year)

4. Average operation ratio for the month (or quarter)

Service Output

           (Percentage change from the previous period, %)

      1. Preliminary

Retail Sales

(Percentage change from the previous period, %)

1. Preliminary

Facility Investment Index

     (Percentage change from the previous period, %)

1. Preliminary

Construction Completed

 (Percentage change from the previous period, %)

1. Preliminary

Exports and Imports

 (US$ billion, y-o-y, %)

Composite Indices of Coincident and Leading Indicators

                                                                                           (Points)

1. Preliminary