S. Korea's manufacturing sector growth falters last year
Published : 2013-02-05 09:12
Updated : 2013-02-05 09:12
South Korea's manufacturing sector growth lagged behind that of the service sector for the first time in three years in 2012 as exports were hurt by the global economic downturn, data showed Tuesday.
The country's manufacturing sector grew 2.2 percent on-year in 2012, compared with a 2.4 percent on-year gain logged by the service industry, according to data by the central bank.
The 2012 data marked the first time since 2009 that the growth of the service sector outpaced that of the manufacturing industry.
The manufacturing sector contracted 1.5 percent while the service industry gained 1.2 percent in 2009.
The South Korean economy relies heavily on exports for growth, which makes the country vulnerable to trends in the global economy.
The economy grew 2 percent last year, the slowest gain in three years, as exports and domestic demand remained weak amid the global economic slowdown, buffeted by the eurozone debt crisis.
The contribution of the manufacturing sector accounted for 0.6 percentage points of the full-year 2012 growth while that of the service sector made up 1.3 percentage points of the economic growth, the Bank of Korea (BOK) said.
Exports declined 1.3 percent on-year to US$548.2 billion last year and imports inched down 0.9 percent to $519.5 billion, according to the trade ministry.
The outlook for this year is not that bright as the won's ascent threatens to crimp Seoul's exports, analysts said.
The yen's relentless descent is all the more challenging to Korean exporters as the won's strength makes prices of Korean goods like autos more expensive in overseas markets compared with their Japanese rivals.
The won appreciated 7.6 percent per dollar last year alone while it gained 19.6 percent against the Japanese yen in the cited period.
The BOK expected the Korean economy will grow 2.8 percent this year and its exports outlook stands at 5.5 percent. (Yonhap News)