According to the Industrial Activity Trends for January report released by Statistics Korea on March 4, 2025, the country’s overall industrial production index for January 2025 fell to 111.2, marking a 2.7% month-on-month decline—the sharpest drop since February 2020. Retail sales also dipped by 0.6%, while investment plummeted by 14.2%.
Sector-Specific Performance
Mining and Industrial Production: Declined by 2.3% month-on-month, driven by reduced output in machinery equipment and electronic components. Semiconductor production edged up 0.1% month-on-month, but automobile production fell 0.4% month-on-month and 14.4% year-on-year.
Manufacturing Shipments: Dropped 6.2% year-on-year, the largest decline since July 2024.
Services Sector: Output decreased by 0.8% month-on-month.
Construction Sector: Plunged by 4.3% month-on-month, the steepest fall since May 2024.
Investment and Consumption
Equipment Investment: Collapsed by 14.2% month-on-month, dragged down by sharp declines in machinery and transportation equipment investments.
Retail Sales: Fell 0.6% month-on-month, with mixed performance across categories:
Durable goods (e.g., communication devices, computers): Up 1.1%.
Semi-durable goods (e.g., clothing): Down 2.6%.
Non-durable goods (e.g., cosmetics): Declined 0.5%.
Economic Indicators
Coincident Composite Index (reflecting current economic conditions): Fell 0.4 percentage points month-on-month.
Leading Composite Index (predicting future trends): Dropped 0.3 percentage points month-on-month.
Government Response
South Korea’s Ministry of Economy and Finance attributed the January 2025 declines to a high base effect from December 2024 and fewer working days. It noted that retail sales showed stability compared to the same period last year but cautioned that monthly volatility in these indicators warrants continued monitoring.
