South Korea’s industrial output in December lost steam after a short-lived recovery in the previous month with semiconductor and oil refining sector alone keeping up activity whereas the broader factory activity performed at its worst level last year since the Asian financial crisis of late 1990s.

According to Statistics Korea on Wednesday, seasonally adjusted mining and manufacturing output decline 0.5 percent in December from the previous month, compared with a 3.6 percent gain in November. Against the same period in 2015, it was up 4.3 percent.

Factory operation averaged at 73.0 percent, slowing from 73.8 percent in the previous month. Inventory declined 0.4 percent on month.

Service sector activity inched up 0.3 percent against November, helped by popularity of new mobile games.

Retail sales - a barometer for private consumption - slowed further to a fall of 1.2 percent from 0.1 percent loss in November as consumer sentiment dipped to the lowest-level since the 1997-1998 financial crisis amid jitters about worsening economy and political unrest from leadership vacuum after impeachment of the scandal-ridden president.

Capital investment growth slowed to 3.4 percent from 5.9 percent as large companies deferred investment plans with their chiefs preoccupied with investigations on bribery involving the president.

For full 2016, manufacturing output rose 1.0 percent against 0.6 percent fall in 2015. Service sector output gained 3.0 percent, the largest growth in five years. Factory operation rate averaged 72.4 percent in 2016, most lethargic after 67.6 percent in crisis-hit 1998.

Retail sales rose 4.1 percent against 2015, driven by government-sponsored tax incentives and sales promotion to bolster consumer demand.

Capital investment fell 1.3 percent on year, the first decline since 2013.

By Kim Gyu-sik

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]