Korea's July Retail Sales Fall 2.4% as Facility Investment Jumps 7.5%
South Korea's economy showed mixed trends in July, with production flat, consumer spending weakening and facility investment gaining momentum. High inflation and record heat weighed on domestic demand, driving service-sector output to its sharpest decline in more than four years.The National Data Of
South Korea's July retail sales fell by 2.4% as facility investment surged by 7.5%, according to the National Data Office. High inflation and record heat dampened domestic demand, leading to a sharp decline in service-sector output, its steepest since February 2022. The retail sales index, a gauge of consumer spending, dropped for the second consecutive month, with passenger-car sales declining 11.1%, mainly due to reduced demand following a temporary tax cut expiration.
Overall, service-sector output shrank by 1.3%, while construction output fell by 1.1%. In contrast, facility investment grew by 7.5%, marking its most significant increase since February. This boost was fueled by a 4.2% rise in machinery investment as manufacturers expanded chip production capacity, while transportation equipment investment jumped 15.4% amid higher ocean freight rates and increased spending on new facilities.
Despite the weak domestic demand, construction output indicators and the outlook for future economic activity improved, with both the cyclical and leading composite indexes rising for a ninth consecutive month.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
