In the heavy industry sector, output in 10 major categories including machinery and equipment (down 36.3 percent), medical and optical machinery (down 23.8 percent) fell while production of audio-video and communications equipment (up 67.6 percent) was up sharply. Output in all areas of light industry with the exception of cigarettes was off compared to the year previous. Decreases were conspicuous in wood and wood products (off 35.7 percent), rubber, bags and shoes (off 25.3 percent) and clothing and fur coats (off 31.3 percent). Shipments Decrease 3.1 Pct in November from a Year Earlier Producer shipments in November were down 3.1 percent on the same month of 1997 but the falloff marked a slowing in the rate of decline. Outbound shipments rose 35 percent while those for the domestic market shrank 19.3 percent. In the heavy industry sector, forwarding of other transportation equipment (up 12.6 percent) and audio-video and communications machines (up 44.6 percent) increased markedly, while that for other machinery and equipment (down 24.4 percent), clothing and fur coats (down 26.3 percent) plummeted. Inventories Decline 16.3 Pct Producer inventories contracted 16.3 percent in November on a year-to-year basis, due to declines in all areas but especially in automobiles, machinery equipment and audio, video and communications equipment with the exception of other electrical machinery. Inventories of other electrical machines rose 7.4 percent while those for automobiles and trailers (off 28.2 percent), other machinery and equipment (down 27.9 percent) other transport equipment (off 39.8 percent) continued their decline. The inventory rate, which reflects the real inventory burden on businesses, declined to 98.6 percent in November, falling below the 100 point mark for the first time since January 1996. Decline in Average Operational Rate Eases The decline of the operational rate in the manufacturing sector slowed in November to fall by 11 percent, compared to a drop of 19.1 percent registered a month earlier. The easing of the decline was a result of booming sales of office and computer machinery plus leather and footwear goods. By manufacturing area, the operational rates in office and computer machinery and leather and shoes were up 25 percent and 6.8 percent respectively, while those for automobiles (down 20 percent), machinery equipment (down 12.7 percent) continued to slide. On a month-to-month basis, the operational rates for non-metal mineral goods (up 13.8 percent) and machinery equipment (up 5.7 percent) posted increases, while those for automobiles (down 6.3 percent) and semiconductors (down 2.7 percent) declined. Productive capacity grew 10.4 percent on a 12-month comparison, while the average operational rate in manufacturing sector during November stood at 68.8 percent, just slightly off the year's high of 70 percent set in September 1998.
Capital Goods Orders Decrease 5.1 Pct in Nov. Orders for capital goods amounted to 1.580 trillion won in November, down 5.1 percent from the same month in 1997. Orders received by the nation's 185 capital goods builders decreased by 18 percent from the public sector, as publicly-run communications manufacturing businesses continued to be hit by the recession. Orders from the private sector increased slightly by 2.5 percent, boosted by booming business in the area of transportation, warehousing and communications. Capital goods shipments for domestic consumption shrank 31.5 percent from a year earlier while machinery imports decreased 38.7 percent on a year-to-year basis. Facility investment declined 33.8 percent from a year earlier. Domestic Construction Orders Tumble 35.6 Pct Orders received by the nation's 250 major construction companies amounted to 3.081 trillion won in November, down 35.6 percent from the same month in 1997. This represented a relatively slower rate of decrease than before, and was mainly due to a rise in orders for housing despite the continued slide in orders from both the public and manufacturing sectors. Orders from the public sector were down 29 percent on a year-to-year basis, as orders nosedived for roads and bridges (down 61 percent), ports and plants (down 87.2 percent), and tap water and water discharge facilities (down 51.3 percent). Private sector orders were off 51.5 percent on a 12-month comparison, most severely affected by enormous contractions in demand for housing (down 42.7 percent), offices (down 93.5 percent) and plant and warehouses (down 91.9 percent).
Wholesale and Retail Sales Drop 8.4 Pct Wholesale and retail sales fell 8.4 percent in November from a year earlier, a marked slowing of the year's decline as business began to pick up in both sectors. The wholesale sector posted a decrease of 4.6 percent in November on a year-to-year basis. Sales of chemical compounds and coal and oil products (up 10.8 percent) and other foods (up 9.5 percent) increased while primary metals (down 17.1 percent) and communications equipment (down 19.4 percent) contracted. The retail sales sector contracted 8.9 percent. Sales of other general merchandise (up 26.3 percent), and pharmaceutical and medical goods (up 9.8 percent) surged while food and beverages (down 24.8 percent) and home appliances (down 17.3 percent) declined. Shipments of consumer products for the domestic market dwindled overall by 19.3 percent in November. By area, shipments of consumer durables decreased 27.4 percent. Shipments of gas boilers (up 49.9 percent) and deluxe cars (up 27.1 percent) rose while those of small and mid-sized and jeep-type passenger cars decreased 68.2 percent. Non-durable goods' shipments fell 15.1 percent, eroded by low sales of ready-made men's and women's clothing (down 26.4 percent) and commercial printed matter (down 35 percent). However, shipments of stainless steel bowls and dishes and the Korean liquor beverage soju bucked the trend by increasing 24.4 percent and 11.7 percent, respectively. In the meantime, imports of consumer goods contracted 43.6 percent from a year earlier, as the recession characterized by increasing joblessness continued to take its toll on consumer sentiment.
Exports Rise 3.7 Pct, Posting Two-Month Consecutive Growth Exports in December rose to $12.88 billion, up 3.7 percent from the same month of 1997, posting a monthly record for 1998. The decline in arrival of letters of credit for exports slowed in November to register a fall in value of just 1.2 percent to $5.26 billion on a year-to-year basis. Letter issuance for textile products (up 12.9 percent) and oil products decreased while that for machinery up 41.4 percent), steel products (up 19.7 percent) and tire and tube products (up 20.9 percent) increased. Light industry exports in November recorded a 3.1 percent increase on a year earlier to reach $2.56 billion. Textile industry exports fell by 14.6 percent while paper, tubes and tires registered increases of 17.7 and 5.7 percent, respectively. Overseas shipments by the heavy and chemical industry sector rose 1.7 percent to $8.54 billion in November. Exports of machinery and chemical goods declined by 18.4 and 4.5 percent, respectively, while shipments of electronic goods and steel products surged by 4.5 and six percent, respectively. The entire value of exports amounted to $11.96 billion, up 1.1 percent from a year earlier.
Import Decline Slows to 14.9 Pct in December The decline in imports slowed in December, falling by just 14.9 percent to $8.69 billion. The slowing of the decline was due to an influx of capital goods and raw material as Korean exports showed continuing signs of a turnaround. The opening of letters of credit for exports reached $5.66 billion, a 4.7 percent increase over the same period of the previous year, thanks to increased openings for imports of oil products (up 11.4 percent), textile goods (up 50.2 percent), and electrical and electronic goods (up 75.3 percent). However, the opening of the bills for the import of crude oil (down 26.5 percent), and machinery (down 36.8 percent) were off markedly. Imports of consumer goods decrea-sed 43.6 percent to $680 million in November. The most severe areas of contraction were in electrical home appliances (down 42.9 percent), clothing (down 68.4 percent) and grain (down 34.8 percent). Imports of resources and material also declined, falling 28.4 percent to $4.59 billion in November, compared to the same month in 1997. The falloff was due in the main to drastic decreases in imports of crude oil (down 47.7 percent), steel material (down 60.4 percent) and chemical goods (down 25.5 percent). Imports of capital goods overall dwindled 25.2 percent to $3.06 billion, machinery goods and electrical and electronic goods sliding 41.1 percent and 17.1 percent, respectively.
Exports of electronic goods reversed their downward trend in November, surging to $3,572 million, up 2.3 percent from a year earlier as a result of renewed strength in shipments of industrial electronic goods and electronic components. Industrial electronic goods shipments increased 13.5 percent to $921 million in November, boosted by strong overseas sales of communications equipment and computers. In particular, exports of wireless communications equipment rose 55.1 percent following a sharp rise in handset sales in the U.S. Meanwhile, the rate of decline in overseas sales of wired communications equipment began to level off markedly, falling by just 3.1 percent on a 12-month basis, compared to a drop of 12.1 percent registered in October. Boosted mainly by a surge in demand in the U.S. for personal computers, exports of computer and related products upticked 2.9 percent in November, breaking their downward trend begun in April and characterized by monthly falloffs of 14 to 30 percent on a 12-month comparison. Buoyed by booming overseas sales of semiconductors, exports of electronic components rose to $2,307 million, up 5.2 percent from a year earlier. Shipments of semiconductors rose 6.2 percent despite efforts to reduce the production of ceratin categories of product, such as D-RAM chips, as a price-boosting measure By contrast, exports of electrical home appliances tumbled 29.2 percent on a year-to-year basis to $344 million, edged by saturated markets in Western industrialized nations and contracting demand from developing areas.
(US$ million , % change from previous month)
The automobile sector experienced a slight recovery in November, as sales in domestic market turned relatively brisk in the year-end season and outbound shipments rose. The decline in production slowed in November, with car output amounting to 193,000, down 22.6 percent from a year earlier. Domestic car sales fell to 72,000, a 35.3 percent decrease from November 1997. However, the decrease represented a slowing in the rate of decline of auto sales. The easing in the decline was due to the introduction of installment payment systems by manufacturers (a regular year-end marketing tactic), the launching of new, mainly large-sized models, and booming sales of light and small-sized cars. Sales of passenger cars tumbled to 49,000, down 44.2 percent from a year earlier. The comparatively sharp decline was ascribed to lackluster sales of large and mid-sized cars. Meanwhile the decline in sales of commercial vehicles slowed remarkably, falling 4.4 percent on a year-to-year basis to 49,000 units. Car exports in November maintained their positive trend which began in September, occasioned by increased demand from the United States and the European Union as the Japanese yen appreciated against the U.S. dollar. The fall launch of new models plus aggressive marketing of compact cars in the Western industrialized nations contributed to the boost in car exports. Sales in Western and Eastern Europe increased 24.7 and 12.6 percent, respectively, while sales in the North American market rose 20.7 percent, due mainly to Daewoo Motor's new model launches. Shipments to most developing countries, though, continued to slide with the exception of those bound for the Middle East, where Korean auto sales registered a 74 percent increase thanks to brisk sales of buses to Saudi Arabia and trucks to Syria. Exports to Africa, Asia-Pacific and Latin America dwindled 59, 19.7, 21.2 and 37.1 percent, respectively.
(Cars, % change from previous month)
Textile product shipments decreased to 1,212 million tons in November, down 15 percent from the same period of the previous year, as the economic downturn in Asia, particularly China and Hong Kong, deepened. Expanded production facilities in competing nations and anti-import legislation in Latin America also served to erode overseas sales. Exports of textile material fell to $56 million, down 26.6 percent from a year earlier as sales of synthetic textile products weakened. Shipments of textile yarn continued their slump, amounting to only $109 million, down 12.8 percent from a year earlier. Exports of textile fabrics declined again, falling to $622 million, a 22.9 percent decrease on a year-to-year basis, as demand from recession-hit major exports markets such as Hong Kong, China, Indonesia and Vietnam waned. Demand from the United Arab Emirates and the European Union was also off. Exports of almost all fabric products including cotton fabrics, woollen fabrics, synthetic textile goods and other fabric material posted declines. Exports of textile end products, however, edged upwards by 1.5 percent to reach $425 million, boosted by booming sales in Western industrialized markets like the United States, the European Union as well as Japan and Taiwan, despite steady declines in demand from Russia, China and Hong Kong. By region, exports to the U.S. rose 7.2 percent from a year earlier while those to China and Hong Kong decreased 29.6 and 22.5 percent, respectively.
The decline in domestic machinery orders continued to ease in November, the total value of such orders falling by 5.1 percent on a year-to-year basis. Public sector demand decreased 18 percent, due to a sizeable falloff in orders from the communications (down 33.1 percent) and power industries (down 21 percent). Private sector orders declined only 2.5 percent from a year earlier, boosted by a rise in orders from the logistical, warehousing and communications industries (up 88.3 percent) and shipbuilders (up 89.1 percent). In the meantime, exports of general machinery declined to $541 million in November, down 27.3 percent from the same period of 1997. Shipments to the United States increased steadily while those to European Union markets and China continued to decline. Agricultural and chemical machinery led November's exports, registering 270.7 and 77.5 percent increases from a year earlier, respectively. However, shipments of textile, transport and lifting machinery remained weak. Imports of general machinery contracted 46.5 percent to $589 million, as the recession continued to erode facility investment. Severe contractions were registered in most categories especially paper and printing machinery (down 75.5 percent), construction and mining machinery (down 77.9 percent) and logistical machinery (down 61.5 percent).
(US$ million, % change from previous month)
Crude steel output in November fell 11.3 percent to 3,341,000 M/T, a drop which while significant, represented a slowing of the year's declining trend. The easing was reflected by a rise in the operational rate of the revolving furnace sector, as production was directed toward a build-up in inventories of facility repair material and hot-rolled coils. Sector output decreased 7.6 percent from a year earlier, but the rate of decline slowed compared with the fall in October due to an increase in demand for hot-rolled coils. Output of electrical furnace products decreased 13.5 percent, in the face of continually eroding domestic consumption and industry-wide operational cut-backs geared to restoring financial stability. Domestic sales declined 30 percent from November 1997 but again, the rate of decrease slowed, boosted by recovering demand from client industries like automobiles and electrical home appliances. Domestic consumption of reinforcing rods, H-sections and steel pipes shrank 30 percent from a year earlier, as demand from the recession-hit construction industry continued to ebb. However, social overhead capital (SOC) projects such as the Yongjong International Airport prompted a slight recovery in the construction sector. November's output of cold-rolled coils recorded the highest level in 1998, boosted by a recovery in demand from again, the auto and electrical home appliance industries, although absolute production was down 47.4 percent on a year earlier. The supply of hot-rolled coils remained short amid increasing demand from newly-established factories coming on-stream. However, output of this item was down 22 percent overall on a year-to-year basis. November's steel exports reached $632 million, up 12.1 percent from a year earlier but representing a leveling-off in overseas demand in comparison with the increases of 20 to 30 percent witnessed in early 1998. Major export items included reinforcing rods and section steel goods for construction purposes.
(1,000 M/T, US$ million, % change from previous month)
Petrochemical output and forwarding in November generally contracted in line with reduced domestic demand, despite a rise in exports. Output, despite a rise in the industry operational rate, decreased 0.7 percent in volume terms from the year-earlier period. The operational rate was down seven percentage points from a year earlier to 82 percent. Domestic shipments rose 7.6 percent on October's totals, but declined 14.8 percent from a year earlier. Domestic sales of synthetic resin were particularly poor, falling 31.2 percent from a year earlier to 252,000 tons, an indication that recovery in the processing sector is still some way off, despite rising expectations for a turnaround in client industries. Petrochem exports were off 14.5 percent from a month earlier, as domestic consumption waned. Overseas sales, on the other hand, surged by 22.4 percent on a year-to-year basis to 509,000 tons.
The volume of output in the Korean shipbuilding industry in November rose 37.9 percent to 1,029,000 gross tons for eight vessels. Cumulative output from Korean yards as of the end of November amounted to 7,264,000 gross tons, up 11.6 percent from a year earlier. The backlog at the close of the month was up 3.7 percent on a year-to-year basis, to 19,376,000 gross tons for 311 vessels.
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The nation's industrial output surged
1.4 percent in November from a year
earlier, registering the highest growth
rate in 1998, thanks to an increase in
outbound shipments and a slowing
decline in domestic consumption. The
heavy industry sector posted a 6.4
percent increase while light industry
output recorded a 14.5 percent decline. 
