South Korea’s industrial production falls more than expected in August

Industrial production in South Korea fell more than market expectations during the month of August, following a strike by auto workers and fewer working days due to the holiday season that reduced production.

Industrial output in South Korea was down 2.4 percent on month in August, data released by Statistics Korea showed Friday. That follows the downwardly revised 1.3 percent gain in July (originally 1.4 percent). On a yearly basis, industrial production advanced 2.3 percent after rising 1.6 percent in the previous month.

Further, the index of all industry production eased 0.1 percent on month and jumped 5.0 percent on year in August. The Manufacturing Production Index fell 2.5 percent on month but gained 2.3 percent on the year.

In addition, the Producer's Shipment Index shed 2.1 percent on month but gained 2.0 percent on the year. The Producer's Inventory Index lost 1.7 percent on month and 4.8 percent on the year. The Production Capacity Index added 0.1 percent on month and 0.5 percent on year, the data showed.

The Index of Capacity Utilization Rate dropped 4.6 percent on month and 2.4 percent on the year. The Manufacturing Average Capacity Utilization Rate was 70.4 percent, down 3.4 percentage points from the previous month.

Moreover, inventories fell 4.8 percent on the year at the end of August, compared with a 2.5 percent fall in the previous month, while investment on facilities increased 14 percent on month in August, reversing an 11.7 percent contraction in July.

Meanwhile, the country’s Ministry of Finance said in a statement that North Korea’s escalating provocations and ongoing corporate restructuring in South Korea pose uncertainties for the economy, while any prolonging of the auto strike will limit any recovery of the economy, Bloomberg reported.