South Korea’s industrial activity strengthened for the second consecutive month in March, helped by brisk car sales from special sales tax benefit and spending from Chinese tourists, according to government data Friday.

Industrial output in March climbed 0.6 percent on month following the same pace growth in February, led by improvement in consumer and corporate spending, said Statistics Korea. Concerns were raised on the industrial front when output fell 1.4 percent on month in January.

Retail sales jumped 4.2 percent from the previous month - strongest in seven years since 5.0 percent growth in February 2009, thanks to release of new smartphone series by Samsung Electronics and LG Electronics and revived growth in car sales.

Sales of automobiles soared 18.2 percent on month in March, extending 9.3 percent growth in February. The government decided to extend special individual tax cut to the end of June after car sales plunged 27.7 percent when the benefit was scrapped.

Consumer sentiment has gained upward momentum, raising hope for a sustained recovery in domestic demand. The consumer sentiment index rose for the second consecutive month in April to register at 101 in April, according to recent data from the Bank of Korea. A reading over 100 means consumers are more optimistic than pessimistic about economic prospects.

Capital investment rose 5.1 percent in March, the first rebound in three months and highest since 11.0 percent in November 2011. Investment in machinery rose 3.3 percent and that in vehicle transportation 10.7 percent.

The manufacturing front, however, remained subdued due to decreased exports. Output from the mining and manufacturing industry fell 2.2 percent on month in March due largely to 21.3 percent plunge from chipmakers and 6.7 percent drop in metal processing sector.

By Kim Gyu-sik

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