S. Korean industrial output gains 10.9 pct in June

Seoul, July 28 (Yonhap News)

South Korea's industrial output continued to rise last month fueled mainly by strong exports, a government report said Friday.

Industrial production in Asia's fourth-largest economy increased 10.9 percent year-on-year in June after moving up 12.1 percent in the previous month, according to the report compiled by the National Statistical Office (NSO).

Overall industrial production grew 1.2 percent compared to the previous month, trailing off from the 1.8 percent gain tallied for May.

"The level of growth decreased somewhat last month, but industrial production continues to grow steadily," said Choi In-keun, head of the economic statistics office. The official said that concerns of the South Korean economy reaching its peak after having recently entered a comeback-stage is premature.

"The economy started to get better around April 2005 and past experiences have shown the country's expansion period lasts 30-31 months on average, making a downward shift unlikely," the expert said.

The South Korean economy is staging a comeback after a two-year slump, helped by a recovery in private spending, increased corporate investment and strong overseas demand.

The economy, which grew 4 percent last year, is expected to expand around 5 percent this year.

The annual gain in June's industrial output was slightly higher than the median 10.8 percent forecasted by Yonhap Infomax in a poll conducted among economists from 16 financial institutions operating in the country. Yonhap Infomax is the financial news arm of Yonhap News.

During the reported month, auto production increased 4.7 percent from a year earlier and semiconductors rose 41.1 percent from the previous month. Production of telecommunication-related goods gained 3.3 percent in the cited month.

Shipments gained 7.6 percent annually in June, down from 10.0 percent in May, while inventories also increased 7.6 percent last month, up from 4.9 percent in the previous month.

Factories were operating at an average 81.9 percent capacity in June, compared with 80.6 percent in May. Sales of consumer goods for June rose 5.2 percent year-on-year, with consumer electronics helping to push up the numbers.

Corporate facility investments increased 2.9 percent annually in June, following a 2.5 percent annual gain in the previous month, the report showed. The NSO data then said that construction orders for June dropped 7.7 percent, while actual building done for the month edged up 0.8 percent.

The NSO's latest report, however, showed the leading industrial index, made up of predictions about such areas as employment, inventory, consumer sentiment and trade, falling off for five straight months.

The index for June dipped 0.4 percentage point for the month following four straight months of decline. Experts at the statistical office said if numbers fall for at least six months, this could herald a downturn in the economy in early 2007.

The coincident composite index, a indication of how the economy is doing at present also dipped 0.1 percentage point, following a decrease in numbers for April and May.