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South Korea's industrial output rebounded last month as the government executed its budget plan on social overhead capital and public administration, a government report showed Thursday.
Production in all industries, including manufacturing, services, construction and public administration sectors, grew 1.6 percent in April from a month earlier after falling 1.8 percent in the prior month, according to Statistics Korea.
From a year earlier, the output increased 3.7 percent in April, the first gain in three months.
The April increase came after the government implemented its budget plan on social overhead capital and public administration, boosting production in the construction and public administration sectors which jumped 9.4 percent and 11.4 percent each last month from a month earlier.
The Finance Ministry said that it would be difficult for the public administration sector to lead the output growth continuously due to its one-off nature, noting that it remained to be seen whether the growth trend would last.
Output in the manufacturing and mining industries expanded 0.8 percent in April from a month earlier, the first rise in four months.
Production in the oil refining sector tumbled 8.1 percent last month due to large-scale facility maintenance, but it was offset by a recovery in the offshore structures and shipbuilding industries along with a launch of new handset models.
Manufacturers operated at an average capacity of 75.9 percent in April, up 0.4 percentage point from a month earlier. Inventories in the manufacturing industry declined 0.6 percent, sending the ratio of inventory to shipment to 115.7 percent in April, down 0.7 percentage point from the prior month.
Production in the services industry increased 0.2 percent in April from a month earlier after reducing 0.8 percent in the previous month. The real estate industry led the increase after the government unveiled measures to boost the housing market.
Retail sales fell 0.5 percent on month in April, reflecting the domestic demand remaining fragile. Sales in discount outlets reduced 2.2 percent, and those for department stores sank 6.2 percent.
Facility investment sank 4 percent in April from the prior month as companies refrained from capital spending amid economic uncertainties. Investment in the transportation equipment sector plunged 17.9 percent, leading the overall decline.
Construction investment jumped 9.4 percent on month in April after falling 2.4 percent in the prior month. Orders in the construction sector declined 5.6 percent, keeping its downward trend for two straight months.
The cyclical component of the composite leading indicator, which reflects outlook for industrial conditions, rose 0.1 point in April from a month earlier. The coincident index of economic indicators increased 0.2 point.
The Finance Ministry cautioned that there remained external uncertainties such as the economic recession in the eurozone and the weak yen trend, saying that it will push for stimulus measures to boost the economy.
The eurozone economy fell 0.2 percent in the first quarter from three months earlier, posting the minus growth for six straight quarters.
The Japanese yen depreciated around 20 percent versus the South Korean won since September 2012, hampering the price competitiveness of local exporters that are competing with Japanese rivals in overseas markets.
The South Korean economy expanded 0.9 percent in the first quarter, posting a growth rate of less than 1 percent for eight straight quarters.
To boost the sluggish economy, the Finance Ministry earmarked 17.3 trillion won (15 billion U.S. dollars) in extra budget. It slashed its 2013 growth outlook for South Korea to 2.3 percent from an earlier projection of 3 percent.
The Organization for Economic Cooperation and Development (OECD) on Wednesday lowered its outlook for the country's 2013 GDP growth to 2.6 percent, from 3.1 percent estimated six months earlier.
