* Feb industrial output s/adj -3.4 pct m/m (Reuters poll 0.0
* Base effects, semiconductors drag down output -statistics
* Economic recovery still ongoing -officials
(Adds more details, official comments)
By Christine Kim
SEOUL, March 31 South Korea's industrial output
plunged at the fastest pace in more than eight years, government
data showed on Friday, erasing gains seen in the previous month
and dragged down by semiconductor production.
In monthly terms, factory output fell by a seasonally
adjusted 3.4 percent in February from a month earlier, marking
the sharpest drop since late 2008 when output plummeted 10.6
percent. A Reuters poll projected output would show no growth
from a month earlier.
The decline was largely due to the unusually sharp 2.9
percent jump seen in January, revised down from a 3.3 percent
rise seen earlier.
Statistics Korea said smartphone manufacturers had opted to
use inventories as sales turned sluggish last month, although
but this was seen as temporary ahead of Samsung Electronics Co
Ltd launching its latest flagship phone, which it
did on Thursday.
The government shrugged off Friday's gloomy data, seeing
South Korea's economy still on its way to recovery.
"Despite political risks in the country, we determine the
economy is expanding at a pace for growth in the mid-2 percent
range," Lee Ho-seung, director general of the economic policy
bureau at the ministry, told Reuters.
From a year earlier, output jumped 6.6 percent in February
after a revised 1.4 percent gain in the previous month,
Statistics Korea said. Previously, the output gain had been
reported at 1.7 percent.
Factory output data tends to be volatile, even after
adjustment for seasonal factors.
RETAIL SALES SHINE, WORST OVER?
Semiconductor output dropped 11.5 percent in February from a
month earlier, while auto output fell 6.1 percent over the same
Service sector output edged up just 0.1 percent on-month,
compared to a 0.3 percent rise in January in seasonally adjusted
terms, also revised slightly down from 0.5 percent reported
However, retail sales jumped 3.2 percent from a month
earlier, bouncing from a 2.0 percent fall on demand for cars and
cosmetics, according to Statistics Korea, easing some concerns
over soft consumption.
Chinese vendors had boosted sales in February to hoard
products ahead of suspected measures by China to curb South
Korea business there, in retaliation against the deployment of
the Terminal High Altitude Area Defence (THAAD) system in South
Korea, a statistics official said.
Park Jung-woo, an economist at Korea Investment and
Securities, said the worst has likely passed.
"Economic growth just below 3 percent may even be possible,"
"Looking at investment and construction orders, the local
economy seems to be doing better than expected."
(Reporting by Christine Kim; Additional reporting by Dahee Kim,
Shin-hyung Lee; Editing by Eric Meijer)