By Kim Jae-won
Staff Reporter

The economy outside of the Seoul area has shown signs of recovery, boosted by a rise in industrial production and domestic demand, according to the Bank of Korea (BOK), Friday.

In its report on the regional economy, the central bank said that manufacturing output rose 4.9 percent between July and September compared to the same period last year.

In particular, it spiked 12.1 percent in September, a drastic rise from 1.2 percent and 1.4 percent growth in July and August, respectively.

The Daejeon and Chungcheong areas showed the most dramatic upturns, with manufacturing production growing 24.6 percent followed by Jeju Province with 12.1-percent growth.

The BOK analyzed that the rising demand for LCDs from China lifted the manufacturing output in the region.

``The main industries in the Daejeon and Chungcheong regions are LCDs and petrochemicals. The demand for the products from China had positive effects on the region,'' Bang Joong-kwon, an economist of the BOK told The Korea Times.

The services industry outside Seoul also slightly improved on the back of rising private consumption.

Auto sales grew 24.5 percent due to tax benefits, continuously rising from the 16.2-percent growth in the second quarter.

Sales at department stores also rose 5.9 percent from the prior quarter's 4.5-percent expansion thanks to improving consumer sentiment. The consumer survey index (CSI) jumped to 100 in July from 86 in the second quarter.

However, the restaurant and lodging industries shrunk drastically in October due to the rapid spread of the H1N1 virus, the BOK said.

Contraction in exports of LCDs, semiconductors and automobiles in provincial areas slowed slightly to 19.3 percent in the third quarter from 20.9 percent in the previous quarter.

However, improvement in economic data has not fully affected employment in the area.

The total number of employees increased by 121,000 compared to the same period in 2008, but it was mostly due to government's employment expansion policy, the ``Hope Worker Project.''

``The number of employees decreased in most industries, except the services sector, which the government stimulated with the public services project,'' Bang said.

Busan, Ulsan, and South Gyeongsang Province saw the number of employees decrease by about 49,000 in the third quarter compared to 51,000 in the second quarter.

``Employment is a trailing indicator. If the economy grows constantly, it will follow the trend too,'' Bang added. ``However, we cannot say when it will come. We need to do more research.''

shosta@koreatimes.co.kr