Industrial output in South Korea posted a surprising jump during March as factories producing display panels and cars received more orders as a result of the shutdowns in China. According to data released by the government, factory output increased by 4.6% MoM in March, the highest rate of growth seen since February 2009 and going against economists’ expectations for a contraction by 1.3% instead.
On an annual basis, factory output was up 7.1% during March, slightly less than the 11.3% increase seen in the previous month. However, despite the pandemic, it managed to post a positive growth for the month of March when countries around the world started shutting down to contain the spread of the virus.
Electronic components like display panels see increased production by 12.7% while automotives registered a 45.1% rise in output during the month. The disruptions in Chinese manufacturing sector due to the coronavirus outbreak helped boost the demand for South Korean goods while new car launches also helped boost output of auto factories.
Despite the promising figures, economists have already warned that a recession in inescapable in South Korea as external demand wanes significantly in the wake of the coronavirus crisis internationally. The economy already saw a contraction in Q1 2020, which is expected to worsen into the second quarter of the year.