Overall industrial output fell for the first time in three months due to an adjustment in semiconductor production.

Consumption rose for a second month and equipment investment jumped as the introduction of semiconductor manufacturing equipment increased, showing mixed trends across indicators.

The National Data Agency said on Tuesday that the seasonally adjusted all-industry production index stood at 114.7 (2020=100) in January, down 1.3 percent from the previous month.

The all-industry production index is a measure of goods and services production activity across all domestic industries and provides a consolidated view of industrial production trends.

Industrial production showed a gradual recovery in November (0.7 percent) and December (1.0 percent) after falling in October (-2.2 percent) last year, but declined in January.

Mining and manufacturing output fell 1.9 percent, a sharp decline. Output rose in sectors such as electronic components (6.5 percent), but fell in semiconductors (-4.4 percent) and other transport equipment such as oil tankers (-17.8 percent).

Semiconductor output rose in November (6.9 percent) and December (2.3 percent) last year before falling in January for the first time in three months.

Lee Doo-won (이두원), director of the economic trends and statistics review office at the agency, described the output decline despite a recent semiconductor export boom, saying semiconductor production appeared to have peaked in September last year and volume growth seemed limited. He added that the export increase was largely driven by prices.

He said a base effect following a surge over the past two months and changes to the schedule for new smartphone launches worked in combination. He added that output of high-spec products such as high-bandwidth memory (HBM) remained solid.

Domestic-demand indicators were relatively solid.

Services output, which reflects service consumption, was unchanged. The retail sales index, which reflects consumption trends, rose 2.3 percent, extending gains to a second month.

Sales increased broadly across semi-durable goods such as clothing (6.0 percent), durable goods such as communications devices (2.3 percent), and non-durable goods such as cosmetics (0.9 percent), due to cold weather and discount events.

Communications devices helped drive the increase as number portability and demand for device replacements rose following KT's waiver of contract termination fees as part of a compensation package related to a hacking incident.

Investment indicators diverged by sector.

The equipment investment index, which shows spending on capital goods supplied domestically, rose 6.8 percent. It turned positive for the first time in four months since September (8.1 percent) last year.

Investment was brisk in transport equipment such as vehicles (15.1 percent). Investment in semiconductor manufacturing machinery surged 41.1 percent, supporting overall machinery investment (4.0 percent).

By contrast, construction work done in real terms fell 11.3 percent. It was the biggest drop in 14 years since January 2012 (-13.6 percent).

Construction orders in nominal terms, which indicate future construction conditions, rose 35.8 percent from a year earlier as orders increased for housing construction and rail civil engineering at the same time. It was the biggest increase in five months.

Lee said the construction industry itself remained weak, but that a third straight monthly increase in orders was a positive sign.

The coincident composite index cyclical component, which reflects current economic conditions, was unchanged. The leading composite index cyclical component, which signals the future economic cycle, rose 0.7 points from the previous month.

[Yonhap News Agency]