July Industrial Production Holds Steady... Facility Investment Up 7.5%, Retail Sales Down 2.4% (Update)

Industrial production in July remained at the same level as the previous month. Although output in the mining and manufacturing sector slightly increased, production in the services sector and construction sector declined, offsetting those gains. While consumption decreased, facility investment continued to grow for the second consecutive month.

According to the "July Industrial Activity Trends" released by the Ministry of Data and Statistics on August 31, total industrial production last month recorded the same level as the previous month. After rising in February (2.1%) and March (0.4%), overall production decreased in April (-0.5%) and May (-0.4%). It then increased by 2.4% in June before remaining flat in July. Compared to the same month last year, it increased by 3.1%.

U.S. President Donald Trump signed a proclamation imposing a 25% tariff without exceptions on steel and aluminum products imported into the United States and announced that tariffs on automobiles and semiconductors are also under consideration. On February 13, 2025, export automobiles and containers were waiting to be shipped at Pyeongtaek Port, Gyeonggi Province. Photo by Kang Jinhyung

Mining and manufacturing production rose by 0.2% from the previous month, continuing its upward trend. This was due to increases across mining, manufacturing, and electricity and gas industries. By sector, production of electronic components rose by 20.7%, and primary metals increased by 4.2%. However, automobile production fell by 4.5%, and other transport equipment declined by 5.0%.

Production in the services sector decreased by 1.3% from the previous month, led by declines in financial and insurance services and professional, scientific, and technical services. Although production in information and communications increased by 3.5%, financial and insurance services (-4.8%), professional, scientific, and technical services (-2.7%), and wholesale and retail trade (-1.1%) all decreased. Compared to the same month last year, services sector output increased by 3.5%.

Consumption returned to a downward trend. Retail sales, which indicate goods consumption, decreased by 2.4% from the previous month as sales of durable goods such as passenger cars and home appliances declined. Sales of semi-durable goods such as clothing also fell by 1.4%, while sales of nondurable goods such as cosmetics declined by 0.1%. Compared to the same period last year, retail sales fell by 0.8%.

Facility investment saw a significant increase. Investment in transport equipment rose by 15.4% and investment in machinery increased by 4.2%, leading to a 7.5% rise from the previous month. Compared to the same month last year, facility investment rose by 24.9%. Domestic machinery orders also increased by 25.4% year-on-year, driven by a 27.0% jump in private sector orders.

Construction completed fell by 1.1% from the previous month. While civil engineering work increased by 18.5%, building construction decreased by 7.4%, offsetting the gains in civil engineering. Compared to a year earlier, it fell by 3.2%. Construction orders also dropped by 34.0% from the same month last year, as orders for both civil engineering (such as railways and tracks) and building construction (such as housing) declined.

The overall business cycle improved. The coincident composite index, which reflects current economic conditions, rose by 0.8 points from the previous month, while the leading composite index, which forecasts future economic trends, also rose by 0.4 points.

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