South Korea’s industrial production rose in January after falling for three consecutive months as manufacturers of cars, machinery and mobile phones boosted output on improving prospects for demand.
Output increased 3.3 percent from December last year, when it dropped a revised 0.7 percent, Statistics Korea said yesterday. The median estimate of 12 economists in a Bloomberg News survey was for a 0.5 percent drop.
Production fell 2 percent from a year earlier, the first year-on-year decline since June 2009 and compared with a 4.6 percent drop estimated by economists.
Yesterday’s production figures and some recent purchasing--manager reports “suggest a pick-up in activity, and help alleviate partly the worries over the growth outlook,” said Frances Cheung (張淑嫻), a senior strategist at Credit Agricole CIB in Hong Kong. “We have always been expecting an economic slowdown in Asia, but no recession. I think the latest data support our view.”
Manufacturers’ confidence on the prospects for this month rose to a five-month high while consumer confidence rose to the highest level in three months last month, according to the latest central bank reports.
“The world economy is expected to show a modest recovery and South Korea’s export growth will likely recover although it’s difficult to predict a big improvement,” the South Korean Ministry of Finance and central bank said yesterday after officials from the two agencies met.
South Korea’s leading index of economic indicators rose 0.7 percent in January from December, when it gained 0.4 percent, yesterday’s report showed.
Statistics Korea said in a separate statement yesterday that it had revised the gauge system for the leading index, taking out capital goods imports and liquidity at financial companies and adding the international raw--material price index.
The total number of sub--indices for the leading index fell to nine from 10 after the change. The index was revised to better forecast business cycles and the impact of changing global economic conditions on the local economy, Statistics Korea said.
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