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Industrial Activity Trends report released by Statistics Korea. / Yonhap News

South Korea’s industrial output and consumption rebounded in June on the back of stronger auto and semiconductor production and higher sales of clothing and cosmetics. However, facility investment declined for the fourth straight month, raising concerns over future growth momentum.

According to Statistics Korea’s “June Industrial Activity Trends” report released on July 31, overall industrial output rose 1.2% from the previous month, ending a two-month decline following drops of 0.7% in April and 1.1% in May.

Manufacturing output climbed 1.7%, driving a 1.6% increase in mining and manufacturing output, largely supported by gains in the auto and semiconductor sectors. Service sector output also rose 0.5%, led by financial and insurance services as well as professional, scientific, and technical services.

Retail sales, a key indicator of consumption, rose 0.5% month-on-month, marking the first increase in four months. Sales of durable goods such as passenger cars fell 1.6%, but semi-durable goods like clothing surged 4.1%, and non-durable goods including cosmetics gained 0.3%.

In contrast, facility investment declined 3.7%, extending its downward trend to a fourth month, primarily due to reduced investment in transportation equipment. Meanwhile, construction output rose 6.7%, returning to positive growth.

The coincident index, which reflects current economic conditions, dipped 0.1 point from the previous month, while the leading index, signaling future trends, edged up 0.2 points.