South Korea's industrial production fell 2.5 percent in October, the steepest monthly drop in over five years, due mainly to a base effect in semiconductor output. Retail sales rebounded 3.5 percent, boosted by the extended Chuseok holiday. Facility investment declined 14.1 percent.
According to data from the Ministry of Data and Statistics, industrial production declined 2.5 percent from the previous month in October. This marks the steepest monthly fall since a 2.9 percent drop in February 2020. Output in the mining and manufacturing sector, a key economic pillar, fell 4 percent.
Semiconductor production plunged 26.5 percent, the sharpest on-month drop since October 1982 when it fell 33.3 percent. The ministry attributed the decline mainly to a strong base effect, as chip output had surged around 20 percent in September, despite rising global demand driven by the artificial intelligence boom.
"Amid booming semiconductor production, the base effect appears to have played an exceptionally large role," said Lee Doo-won, a ministry official.
Retail sales, an indicator of private consumption, rose 3.5 percent on-month, rebounding after two consecutive declines and marking the highest increase since February 2023. The growth stemmed largely from a base effect and the extended Chuseok holiday in early October. Sales of semidurable goods like apparel climbed 5.1 percent, nondurable goods including cosmetics jumped 7 percent, while durable goods such as home appliances dropped 4.9 percent.
Facility investment decreased 14.1 percent, reversing the previous month's rebound, with machinery down 12.2 percent and transportation equipment falling 18.4 percent. These figures highlight ongoing volatility in South Korea's manufacturing and consumption sectors.
