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UPDATE 1-S.Korea Oct factory output marks sharpest drop since 2013 on holiday distortions
November 29, 2017 / 11:48 PM / in 16 days

UPDATE 1-S.Korea Oct factory output marks sharpest drop since 2013 on holiday distortions

(Adds details, Statistics Korea official’s comments)

* Factory output drops 5.9 pct y/y, sharpest since Feb 2013

* Analysts saw 1.8 pct drop in y/y in a Reuters poll

* Oct. holidays distorted data - official

By Cynthia Kim

SEOUL, Nov 30 (Reuters) - South Korean posted its sharpest fall in industrial production since 2013 on Thursday, with the data distorted by the national Chuseok holiday.

Statistics Korea said factory output dropped by 5.9 percent in October from a year earlier, the biggest fall since a 8.3 percent slump in February 2013.

The reading missed a 1.8 percent decline forecast in a Reuters survey and follows a revised 8.5 percent gain in September.

Output fell 1.1 percent from September, missing a 0.2 percent gain estimated in the survey.

“There is a recovery in factory activity, but October being a holiday shortened month led to a dip in output. Weaker car exports also dragged manufacturing output in October,” a Statistics Korea official said.

South Korea celebrated the Chuseok holiday from Oct 1 through Oct 9 this year unlike last year when the holiday fell in September, distorting production data.

Although the recovery in industrial production has been uneven this year, a global chip boom driven up tech output, hoisting gross domestic product growth to the fastest in seven years.

The Bank of Korea is widely expected to raise interest rates for the first time in more than six years at its Thursday meeting amid a sustained export boom.

Output barely grew from a month earlier in September but the revised data nonetheless marked the fastest annual jump in more than four years.

October car production fell 17.5 percent from a year ago, while output of transportation equipment fell 37.7 percent, driving the down manufacturing index.

Service sector output declined 1.7 percent in seasonally adjusted terms on-month after a revised 1 percent gain in September.

Reporting by Cynthia Kim and Shin-hyung Lee; Editing by Eric Meijer

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