Impact of Middle East War Becomes Evident... April Sees 'Triple Decrease' in Production, Consumption, and Investment (Updated)

In April, production, consumption, and investment all decreased simultaneously as a result of the impact of the Middle East war. Just one month after recording a "triple increase" in March, all indicators turned downward.

According to the "April Industrial Activity Trends" released by the Ministry of Data and Statistics on May 29, total industrial production decreased by 0.6% compared to the previous month. After increasing for two consecutive months in February (2.1%) and March (0.4%), production turned to a decline in April.

Manufacturing and mining production decreased by 0.7% from the previous month. Semiconductor output increased by 3.1% month-on-month and 13.0% year-on-year, continuing a favorable trend in the sector. However, declines in automobiles (-10.0%), petroleum refining (-19.4%), and machinery equipment (-3.6%) led the overall decrease.

Following President Donald Trump's signing of a proclamation imposing a 25% tariff without exceptions on steel and aluminum products imported into the United States, and his announcement that tariffs on automobiles and semiconductors are also being considered, export vehicles are waiting to be loaded at Pyeongtaek Port, Gyeonggi Province on February 13, 2025. Photo by Jinhyung Kang

For petroleum refining, the sharp decrease is attributed to the aftereffects of the Middle East war and disruptions in refinery operations.

Service sector production decreased by 1.0%. Although information and communications (4.3%) and professional, scientific, and technical services (3.0%) increased, financial and insurance services (-7.7%) and wholesale and retail trade (-1.5%) declined, driving the overall decrease.

Consumption also fell by 3.6%. Sales of durable goods dropped by 11.1% due to decreases in sales of telecommunications devices, computers, and passenger cars. Facility investment decreased by 3.6% from the previous month, mainly due to reduced transportation equipment investment. Construction completed also decreased by 1.4%, with both building (-1.5%) and civil engineering (-1.1%) projects posting lower performances.

The coincident composite index, which reflects the current state of the economy, rose by 0.2 points from the previous month, while the leading composite index, which forecasts future economic conditions, also increased by 0.6 points.

This content was produced with the assistance of AI translation services.