South Korea's industrial production increased for four straight months, confirming the export-driven economy may bottom out amid easing external uncertainties.

Production in the mining and manufacturing sectors rose 1 percent in December from a month earlier, Statistics Korea said in a statement on Wednesday. The production kept its upward momentum for four months in a row after turning around in September last year.

The economic data confirmed growing views that the Asia's No.4 economy may bottom out in the third quarter. The country's economic growth rose to 0.4 percent in the fourth quarter on an on- quarter basis after rising 0.1 percent in the prior quarter.

Exports, which account for more than half of the economy, showed signs of recovery since September, leading to production growth. External uncertainties eased after the U.S. fiscal cliff issue was tackled and the eurozone fiscal improved.

"Momentum of the growth recovery has carried over from the fourth quarter of 2012 to the first quarter of 2013," Kwon Young- sun, an economist at Nomura in Hong Kong, said in a report after the data release. "We forecast exports to surge 23 percent on-year in January from a 5.7 percent drop in December."

The country's exports declined last month due to fewer working days, but the daily average exports were 2.09 billion U.S. dollars in December, up from 1.99 billion dollars in November.

Global demand showed signs of recovery. Existing home sales in the United States grew the most in five years in 2012, and China's fourth-quarter economic growth made the first rebound in two years. Confidence among South Korean consumers and businesses improved in January in accordance with the improved global conditions.

Local manufacturers operated at an average capacity of 78.4 percent, up 0.9 percentage point from a month before. The factory utilization rate rose for four straight months.

Production in the service industry grew for two straight months, but retail sales decreased 1.1 percent last month as cold weather and frequent snowfall reduced outside activities. Temperature averaged minus 1.7 degrees Celsius in December, the second-lowest since 1973. The number of days with snowfall was 11. 2 days, the highest since 1973.

Both leading and coincident index of economic indicators rose in December for two straight months. The leading index rose 0.4 point on-month to 99.9, and the coincident index increased 0.1 point to 98.4.

Facility investment jumped 9.9 percent in December from a month ago after falling in the prior month due to a rise in investment of machinery and transport equipment.

The value of construction completed at a constant price rose 5. 8 percent in December, up from a 2.2 percent gain in November. The figure for construction orders at a current price plunged 22.4 percent, continuing to fall for the third consecutive month.