S. Korea's industrial output shrinks 9 pct in May

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SEOUL, June 30 (Yonhap) -- South Korea's industrial output shrank in May from a
year earlier as demand in the automobile and machinery sectors declined amid
sluggish overseas markets, a government report showed Tuesday.
According to the report by the National Statistical Office (NSO), production in
the mining and manufacturing sectors fell 9 percent last month from a year
earlier, compared with an 8.2 percent on-year decline in April.
May marked the second straight month of single-digit decline in industrial output
after it fell more than 10 percent annually between November-March. From a month
earlier, however, production grew 1.6 percent in May, maintaining its monthly
expansion for five months running.
"Though the on-year contraction accelerated from a month earlier, things seem to
be staying on a path to recovery," Yun Myung-Joon, director of the NSO's
short-term industry statistics division, told a press conference.
The latest industrial production data comes amid budding optimism that the worst
for the South Korean economy might be nearing an end as some indicators are
showing signs of stabilization.
Business and consumer sentiment are perking up, boding well for investment,
employment and consumption, hard-hit by the worsening economic outlooks.
Global organizations have been turning favorable on the improved outlooks for
South Korea's economy.
Last week, the Organization for Economic Cooperation and Development said that
the South Korean economy will grow 3.5 percent next year after contracting 2.2
percent this year, marking the fastest rebound among its 30 member countries.
The government revised up its growth outlooks for this year from minus 2 percent
to minus 1.5 percent, citing the positive effects of stimulus measures and
stabilizing financial markets.
It cautioned, however, that it is premature to say the economy is making a full
recovery, adding that it will stick to its expansionary macroeconomic policy
stance for the time being.
The government stressed there are several downside risks, including sluggish
employment and corporate investment. Exports also remain in a slump, with
overseas shipments in May plunging 28.3 percent from a year earlier following a
19.6 percent fall in April.
The report showed that sales of consumer goods grew 1.7 percent in May, reversing
from a 3.9 percent contraction a month earlier. The May figure marked the first
time that consumer good sales rose since April last year.
However, facility investment plunged 13.1 percent in May from a year earlier
compared with a 25.6 percent decline in April. The average facility operation
ratio inched up 73 percent from the previous month's 71.6 percent, according to
the report.
Yun of the NSO said consumption seems to be picking up thanks to the government's
demand-bolstering measures such as tax benefits, but added, "It is early to say
that production is making a full-swing rebound since exports still remain
sluggish."
kokobj@yna.co.kr
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