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S. Korea sees sharpest fall in consumption in 67 months amid low production
Last Updated: 2016-11-01 07:08 | Xinhua
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Private consumption in South Korea fell the most in 67 months in September amid soft production and facility investment, a government report showed on Monday.

Sales in retail stores, which reflect consumer spending, declined 4.5 percent in September from a month earlier, according to Statistics Korea. It was the sharpest fall since February 2011.

The statistical agency attributed the faltering consumption to temporary factors, including the discontinuation of Galaxy Note 7 smartphone, Samsung Electronics' latest flagship model facing the permanent end of production and sales over reported cases of catching fire and heating up.

Samsung expected the Note 7's shock wave to continue by the first quarter of next year, slashing its third-quarter earnings results to more than 6 billion U.S. dollars from 9 billion U.S. dollars.

It would add difficulty to the lackluster South Korean economy, which grew 0.7 percent in the July-September quarter compared with the previous quarter. The expansion depended mostly on construction investment, which raised the third-quarter real gross domestic product (GDP) by 0.6 percentage points.

Sales of non-durable goods such as food and beverage slipped 5.1 percent, with those for durables like consumer electronics tumbling 6.1 percent. Sales in semi-durable goods, including clothing, dipped 0.6 percent.

Production in all industries reduced 0.8 percent in September from the previous month. It was a downturn in five months and the fastest decline since January.

However, output in the mining and manufacturing sectors rose 0.3 percent thanks to a rebound in auto production that increased 5.7 percent as the effect weakened from labor strikes in the country's biggest carmaker Hyundai Motor.

Production in semiconductors and other transport equipments slumped 6.2 percent and 4.2 percent respectively, but electronics parts production expanded 4.6 percent.

Manufacturers posted a factory utilization rate of 71.4 percent on average, up 1.2 percentage points compared with the previous month. Inventories among manufacturers fell 1.5 percent last month.

Services industry logged a 0.6-percent slump in production as maritime logistics were hit hard by Hanjin Shipping, South Korea's largest shipping line that has filed a court receivership amid lower freight rate and higher charter costs. The transport sector's production declined 3.1 percent compared with the previous month.

Facility investment recorded a 2.1-percent slide last month as companies refrained from spending capital amid lingering uncertainties at home and abroad.

Capital spending in machinery slumped 2.6 percent on a monthly basis, with investment in transport equipment declining 0.9 percent.

Machinery orders gained 3.8 percent as the public sector increased orders for electrical facility, but completed construction fell 4.7 percent, turning downward in five months.

The cyclical factor of leading economic indicators, which heralds future business conditions, rose 0.2 points last month, but the figure for coincident economic indicators fell 0.3 points.

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