South Korea's industrial production is expected to have rebounded rather significantly in September, mainly on the strength of non-electronics sectors such as auto. The pickup in electronics exports in the September trade data will mostly be driven by seasonal factors, except for mobile phones where the strength appears to be real.
Industry data suggests that auto production rebounded by around 5% mom (seasonally adjusted), as the impact from labour strikes was minimal this year. Among other non-electronics sectors, analysts expect a technical rebound in electrical equipment, metal products and other transportation equipment that all showed a sizeable contraction in August.
"If our forecast is correct, industrial production growth in Q3 2015 could be as high as 1.5% qoq and this strong momentum should persist in Q4 2015. The question remains as to how long the recent discrepancy between industrial production and GDP (manufacturing production) will last", states Societe Generale.
