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South Korea's April industrial output limps even as exports surge
[SEOUL] South Korea's industrial output declined unexpectedly in April from March even as exports surged for the sixth straight month.
Industrial output fell 2.2 per cent in April from March on a seasonally adjusted basis, data from Statistics Korea showed on Wednesday, missing the 0.8 per cent rise expected by economists in a Reuters survey.
In annual terms, factory output in April rose 1.7 per cent after a revised 3.3 per cent gain in the previous month.
The March industrial production index was revised up to a 1.2 per cent rise on-month from the 1 percent rise reported earlier.
Wednesday's unflattering outcome adds an element of uncertainty for the Bank of Korea, which plans in July to upgrade the economic growth outlook for this year from the current 2.6 per cent.
Production of semiconductors and cars dropped 9.2 per cent and 2.6 per cent on-month respectively, indicating the limits to growth for local industries' limits soaring exports. "Demand for semiconductors, which has been boosting overall exports, seems to be slowing the second quarter," said Park Jung Woo, economist, Korea Investment and Securities.
"Exports posted double-digit growth throughout the first quarter, and cannot maintain that so the pace of expansion will come down to a high-single digit in the months ahead," Mr Park said.
South Korea last month raised its export outlook for the year after first quarter economic growth accelerated to 0.9 per cent from 0.5 per cent quarterly expansion in the previous period. "Growth momentum is still there and will continue to improve," a Statistics Korea official from said after the data was released.
Market participants will be looking to May export numbers due June 1 for further clues on global demand, with analysts predicting a 13.6 per cent jump from a year earlier.
Service sector output rose 0.1 per cent in April in seasonally adjusted monthly terms.