S. Korea's industrial output rose in 2024 despite persistent weak domestic demand

Findings for the year 2024 show Korea's industrial output remained sturdy but the country's retail sales lost substantial ground.

Our correspondent Moon Hye-ryeon covers the latest data.

South Korea's industrial production saw a rise in 2024, largely driven by a recovery in semiconductor exports.

However, domestic consumption indicators remained sluggish, highlighting a growing disparity between sectors.

According to data from Statistics Korea on Monday, the country's overall industrial production index showed a one-point-seven percent year-on-year increase.

This growth outpaced the one-percent increase recorded in 2023, and comes due to strong performance in the manufacturing sector.

Manufacturing output rose by 4-point-4 percent – a turnaround from the 2-point-6 percent decline recorded in 2023.

Semiconductors and pharmaceutical production played a key role with a surge in exports, but domestic manufacturing shipments fell by two percent, underscoring weak domestic demand.

The service sector saw slower growth, seeing the lowest since the COVID-19 pandemic in 2020, due to a downturn in retail and wholesale trade and hospitality services.

Retail sales dropped by 2-point-2 percent, which is the sharpest annual decline since 2003.

This also marks three straight years of contraction in retail sales – the longest streak of decline since data collection began.

Sales fell across all three categories measured – durable goods such as automobiles, non-durable goods such as food, and semi-durable goods such as clothing.

A spokesperson from the agency said that the impact of the political turmoil and the Jeju Air plane crash in December on these numbers is yet unclear.

"Declines in industries like food and services, lodging, arts, sports, and leisure may have been influenced by the political climate and national mourning period in December. That said, it's difficult to isolate the exact impact of these factors from the numbers."

Construction activity, particularly in building projects, also recorded the biggest drop since 2001 last year with a decline in completed construction work.

Capital investment, however, grew by 4-point-1 percent, driven by increased spending on semiconductor manufacturing equipment and transportation equipment.

Moon Hye-ryeon, Arirang News.