Pandemic Pulls Down Korea's Industrial Output by 0.3%

South Korea's industrial output dipped 0.3 percent in March from a month earlier, as exports and private consumption went down due to the pandemic, according to Statistics Korea.

The service sector posted the sharpest decline at 4.4 percent on-month, which is also the sharpest drop since Statistics Korea started compiling data in 2000.

However, production in manufacturing, mining, and gas and electricity industries rose 4.6 percent from a month earlier.

The unexpected gains in these industries were attributed to the increase in auto output by 45.1 percent on-month.

According to Ahn Hyung-joon, a senior official at Statistics Korea, the expanded output in auto and auto parts firms were due to the easing disruptions of the parts supply and more auto sales due to tax benefits.

Production of chips also exhibited a boost of 15.5 percent on-month.

But while sales of durable goods, such as cars, grew by 14.7 percent, those of nondurable ones, such as cosmetics, decreased by 11.9 percent.

Local manufacturers faced problems in securing key parts as suppliers suspended their operations and global shipments disrupted by entry bans.

In February, the nation's industrial output contracted by 3.5 percent on-month, which is its sharpest decline since February 2011.

Vice Finance Minister Kim Yong-beom noted that South Korea might post a trade balance deficit in April, which is its first monthly decline in 99 months.

Kim said the March data on industrial output is better than those of other nations, but the global lockdown may take a heavier toll on the nation's exports in the coming months.