Korea: Economic activity shrinks in October
Latest reading: Economic activity was down 2.5% in seasonally adjusted month-on-month terms in October, following a 1.3% increase in the prior month. October’s reading was the weakest since February 2020 and surprised markets on the downside.
Relative to the previous month’s figures, readings in October softened for services (-0.6% on a seasonally adjusted month-on-month basis vs +2.0% in September), industry (-4.0% vs -1.1% in September) and construction (-20.9% vs +12.3% in September).
The sharp contraction in the industrial sector was driven by steep declines in semiconductors and electronic components due to a high base-effect resulting from previous price gains. Looking at services, a calendar effect due to fewer working days during the long Chuseok holiday weighed on the result.
In annual terms, economic activity fell 0.8% in October, following a 2.3% increase in the prior month.