By Yoon Ja-young
Staff Reporter
Industrial output plunged by 9 percent in May from a year ago but businesses still have a positive outlook.
According to the National Statistical Office (NSO), output in the mining and manufacturing sectors fell by 9 percent year-on-year, worsening from the 8.2 percent fall recorded in April.
The year-on-year production index had been turning for the better since recording a 25.5 percent fall in January, but the fall in May shows that the economy is not recovering at a solid pace.
The shipment of goods by producers fell by 8.7 percent from the previous year, worsening from the 8.1 percent year-on-year fall seen in April. It showed that domestic market is especially in poor condition, with shipments for the market falling by 9.7 percent.
Consumption and facility investment, however, are showing signs of recovery.
Sales of consumption goods increased by 1.7 percent from a year ago, marking the first year-on-year growth since last September. Sales of consumption goods also grew by 4.8 percent, mainly thanks to the 20.6 percent sales increase in cars, which benefited from the government tax support for those who purchase new cars.
Facility investment fell by 13.1 percent from a year ago, slowing down the plunging pace. Facility investment in transportation grew by 16.7 percent in May from the previous month, marking first growth in eight months.
Manufacturers had a positive view on the economy. According to the Bank of Korea, the business survey index (BSI) of 2,187 manufacturers around the country recorded 77 in June, up 3 points from the previous month. It is the highest figure since June 2008, with the figure increasing for the fourth month in a row since hitting a bottom of 43 in February.
A reading below 100 means more businesses are pessimistic rather than optimistic about the economy, while an indication above 100 means optimists outnumber pessimists.
The improvement was notable among small businesses, whose BSI rose to 74 from 70 of the previous month. Businesses dedicated to the domestic market also had the figure jump to 75 from 69.
However, they had a pessimistic view on profitability, on which the BSI fell to 83 from 85. The central bank explained that rising global resource prices are making them turn pessimistic.