Korea's May manufacturing output falls by most in over 5 yearsUpdated: 2014-06-27 20:34:14 (KST)
Korea's pace of economic recovery is in question once again. with the nation's output in the manufacturing and mining sector falling 2.7 percent in May from a month earlier.
That marks the biggest drop since December 2008 when the global financial crisis broke.
Statistics Korea says that the dip came largely from the automobile and semiconductor industry which saw sluggish exports last month, BUT added that the weak data does NOT necessarily mean the Korean economy is losing momentum.
"The dip in exports is mainly due to fewer working days in May, prompted by long holiday weekends, while exports to Southeast Asian nations also remained low."
In fact, while Korea's overall exports dropped one percent last month from a year earlier, the average daily export volume ROSE six percent to around 2.2 billion U.S. dollars -- the second-highest level in history.
Looking forward, experts also say it's likely that the Korean economy will remain on the track to recovery thanks to the U.S. economy, which has a huge effect on the nation's exports.
"Although the first quarter growth in the United States was held back by an unusually cold winter, recent employment and consumption data are showing a firm upward trend."
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The nation's output data was not all negative.
Service sector production rose zero.6 percent in May from a month ago, after declining more than one percent in April.
Retail sales also rose one-and-a-half percent -- a sign that the economy might be out of the sluggish private spending trap brought on buy the deadly ferry disaster.
"Although it added that more research is needed, the statistics agency said the Korean economy hit a low point sometime in late 2012 or early 2013 and based on that analysis, the economy should now be on a rebound trend.
Hwang Ji-hye, Arirang News."
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It could be because more and more South Korean companies are sending production to China. Factories are opened in foreign countries to take advantage of lower labor costs and such. Hyundai and KIA cars are made in the U.S. states of Alabama and Georgia respectively. This is less cars assembled and exported from South Korea.