South Korea's IP likely fell further in August as exports contract significantly

South Korea's Trade data show that exports contracted from $46.6bn in July to $39.2bn in August, though this was partially driven by the cancellation of a delivery in the shipbuilding sector that is unrelated to production activities. 

"Industrial production likely fell for a second consecutive month in August given a significant decline in exports. However, a sizeable decline in non-electronics exports (including autos, metals and chemicals) leads to expect a considerable fall in industrial production, even taking into account seasonal factors (summer holidays) and the relative strength of the electronics sector", says Societe Generale. 

Any year-on-year improvement in growth will only reflect base effects, as industrial production declined by 3.3% in August 2014. Recently, industrial production has tended to move independently of GDP, but sustained weakness in industrial production is nonetheless clearly bad news for the growth outlook, especially in conjunction with weak September exports.