South Korean exports plummeted nearly 15% in October from the year prior, while Japan’s factory activity hit a three-year low and the sixth-straight month of contraction, data published separately in the two countries on Friday showed,
South Korea’s Ministry of Trade Industry and Energy found that exports were down 14.7%, year on year, largely due to the weak performance of the semiconductor industry and global trade conflicts, Yonhap reported from Seoul.
Korea’s $46.78 billion worth of outbound shipments in October marked the 11th consecutive month of dwindling exports, the ministry figures revealed.
Exports of chips, the country’s flagship industrial sector, fell 32.1% to a value of $7.8 billion. The sector is being impacted by a lingering cyclical downturn that, it had previously been hoped, would ameliorate late in the second half of 2019. Though chip price decreases have slowed, inventories continue to make up shortfalls, the ministry said.
Among the country’s other key products, petrochemical exports were down 22.6% percent to $3.45 billion and auto exports were down 2.3% to $3.82 billion.
Exports of ships, however, beat the downward trend, rising 25.7% to $1,86 billion, as Korea yards recover from a long decline in their order books. Climbing orders from 2017 are now being reflected in this figure, Yonhap noted.
Trade disputes appeared to be reflected in the numbers.
Amid the Beijing-Washington trade war, exports to China, Korea’s leading trading partner, plunged 16.9% while shipments to the US were down 8.4%. Korea’s exports to Japan also fell 13.8% at a time when a deep chill in Seoul-Tokyo relations, sparked by a historical dispute over wartime forced labor, has impacted both trade and security ties between the countries.
In Japan
In Japan, factory activity hit a three-year low last month – the sixth-straight month of contraction, Reuters reported from Tokyo, according to data published Friday.
The Jibun Bank Final Japan Manufacturing Purchasing Managers’ Index (PMI), compiled by IHS Markit, dropped to 48.4, hitting its lowest level since June 2016. The index had stood at 48.9 in September.
The data showed that total new orders shrank at their fastest pace since May 2016. Factory output and new export orders were also shrinking.
According to Reuters, IHS Markit cited the devastating impact of last month’s Typhoon Hagibis and collateral impact from the Sino-US trade frictions for the grim numbers.