By Kim Jae-kyoung
Staff Reporter
The economy outside the Seoul area has shown signs of turning around in line with a pick-up 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 shrank 6.6 percent between April and June, compared with the 16.1-percent contraction the previous quarter.
In particular, it contracted only 1.4 percent in June, a turnaround from the 9.2-percent drop in May.
By region, Jeju Province showed the most dramatic upturn, with its manufacturing production growing 13.9 percent compared with the previous quarter’s 10.9-percent contraction, followed by Daejeon and Chungcheong Province with 8-percent growth.
“Most regions have stayed in negative territory but the pace of decline has slowed down considerably,’’ a BOK economist said.
The service industry outside the Seoul area has also improved, while private consumption has bottomed out.
The sales index for large retail outlets declined 0.7 percent in the second quarter from a year ago, compared with the previous quarter’s 3.7-percent contraction. Auto sales grew 16.2 percent due to tax benefits, a turnaround from the 18.6-percent fall in the first quarter.
Sales at department stores also rose 4.7 percent from the prior quarter’s 0.3-percent expansion thanks to improving consumer sentiment. The consumer survey index (CSI) jumped to 92 in July from the first quarter’s 72.
“Construction activities and facilities investment are showing signs of a rebound, bolstered by large-scale public projects initiated by the government,’’ the economist said.
Contraction in exports in the provincial area slowed to 20.7 percent in the second quarter from 25.4 percent a quarter before.
However, improvement in economic data has not fully translated to businesses in the non-Seoul area. Only a few companies in provincial areas feel the warmth of the economic upturn, according to a survey.
In its survey of 500 firms in provincial areas and 100 companies in the capital region, the Korea Chamber of Commerce and Industry (KCCI) found that 60.7 percent of provincial enterprises don’t feel an economic rebound, compared with 30.7 percent for firms in the capital area.