South Korea’s industrial output continued to decline for the third consecutive month in November, recording a 0.4% month-on-month drop. The “Statistics Korea“ agency attributed this decline to a 5.4% decrease in auto production due to ongoing labor strikes, despite the positive performance of the semiconductor sector.
Labor Strikes Hit the Auto Sector
The continuation of labor strikes at auto parts factories, which began in October, disrupted the production of finished vehicle components. Jung Mi-sook, an official at “Statistics Korea,” confirmed that the strikes significantly impacted the sector, leading to a decline in production in one of the Korean economy’s key industries.
Strong Growth in the Semiconductor Sector
In contrast, the semiconductor sector saw a 3.9% monthly growth, driven by strong demand from global markets. The sector continues to perform strongly as one of the main pillars of the Korean economy, partially offsetting declines in other sectors.
Decline in the Financial Sector and Temporary Retail Sales Improvement
Output in the financial sector and insurance industry declined by 2.9% due to slowing loan growth. On the other hand, retail sales rose by 0.4% after two months of decline, driven by increased sales of semi-durable goods, such as clothing, in preparation for the winter season.
Annual Decline in Industrial Production
On an annual basis, total industrial output contracted by 0.3% in November, while retail sales fell by 1.9%, reflecting the ongoing structural challenges facing the Korean economy.
The Industrial Sector Faces a Tough Test
Amid continued labor strikes and a weak financial sector, the situation requires government intervention to support struggling industries and ensure production stability. Despite the challenges in the auto sector, the semiconductor industry emerges as a hope for the Korean economy, opening positive prospects amid growing global demand.