S. Korea's Q2 manufacturing output grows most in 36-years

SEOUL, Aug. 10 (Yonhap) -- South Korea's second-quarter manufacturing output
posted the biggest quarterly gain in 36 years as companies scurried to raise
inventory amid resilient demand, data showed Monday.

Manufacturing production expanded 8.2 percent in the April-June period from three
months earlier, the fastest growth since 8.2 percent in the fourth quarter of
1973, according to the data by the Bank of Korea (BOK).
The second-quarter increase was also a sharp turnaround from a 3.4 percent
on-quarter contraction in the first quarter and an 11.9 percent shrinkage in the
three months to December.
"The rebound came after a global economic downturn weighed heavily on previous
results," a BOK official said. "The manufacturing sector is more prone to
external economic shocks than other industries."
Private economists said the quarterly increase resulted mainly from corporate
efforts to increase inventories following massive inventory adjustments.
"With domestic and overseas demand picking up, manufacturers increased output to
replenish inventories in the second quarter," said Ko Yoo-sun, an analyst at
Daewoo Securities Co.
The government's offer of tax benefits for car purchases also helped boost
overall manufacturing production as the auto industry has a far-reaching impact
on other sectors' output, she said.
Despite growing market optimism, she said, external uncertainty remains high as
there is concern that the world economy may lapse into a downturn after a brief
rebound.
According to the central bank data, second-quarter manufacturing output remained
still sluggish compared with a year earlier, marking an annual fall of 7.9
percent.
Bolstered by reviving exports and government stimulus packages, the South Korean
economy grew 2.3 percent in the April-June period from three months earlier.
As of 2008, manufacturing output accounted for 28.1 percent of South Korea's
nominal gross domestic product with consumer-electronics producers cited as the
largest manufacturer, the central bank said.
pbr@yna.co.kr
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