South Korea Oct factory output falls most in 10 months on weaker chip production

SEOUL :South Korea’s factory output unexpectedly fell on weaker chip production in October and posted the biggest drop in 10 months, official data showed on Thursday.

The industrial output index fell 3.5 per cent in October from a month earlier on a seasonally adjusted basis, according to Statistics Korea. Economists in a Reuters survey had expected a gain of 0.5 per cent.

The fall came after a gain of 1.7 per cent in September and marked the biggest monthly decline since December 2022.

Production of semiconductors fell 11.4 per cent and machinery declined 8.3 per cent, outweighing a 10.4 per cent jump in electronic components.

On a yearly basis, factory output rose 1.1 per cent, compared with gains of 2.9 per cent in the prior month and 5.2 per cent expected by economists.

South Korea’s economy fared better than expected in the third quarter with the expansion underpinned by exports, backing the case for the central bank to keep rates on hold for a while.

In October, output also fell in the services sector, down 0.9 per cent over the month, marking its first decline since May.

The all-industry output index fell 1.6 per cent, the biggest drop since April 2020.