South Korea October exports decline on fewer working days

SEOUL (CNA) – South Korean exports slipped back into contraction in October, as the Chuseok holiday cut working days, although chip and car sales remained robust, government data showed yesterday.

Exports slid 3.6 per cent from a year earlier to USUSD44.98 billion, after a 7.6 per cent jump in September – the first expansion since February and the fastest rise in 23 months.

The October decline was less than the four per cent drop forecast by 15 economists in a Reuters survey. Average daily exports, however, recorded the first expansion in nine months with a 5.6 per cent rise, adding to recent signs that Asia’s fourth-largest economy is seeing a moderate recovery.

South Korea’s monthly trade data, the first to be released among major exporting economies, is considered a bellwether for global trade.

A “negative reading was inevitable due to fewer working days, but the rate of decline was better than expected… That shows exports recovery has been resilient at least by October,” said HI Investment & Securities’ chief economist Park Sang-hyun. The trade ministry said shipments of semiconductors and cars jumped 10.4 per cent and 5.8 per cent, respectively, but those surged 20.9 per cent and 15.9 per cent each in average daily terms.

Shipments to China, South Korea’s biggest trading partner, dropped 5.7 per cent due to its eight-day National Day holiday, but that rose 3.2 per cent when eliminating calendar effect, the trade ministry said.

Those to the United States (US) and European Union (EU)rose 3.3 per cent and 9.5 per cent, but surged 13.1 per cent and 19.9 per cent, respectively, in per-day terms. Economists are now worried surging coronavirus cases globally and fresh lockdowns in Europe may hurt overseas demand for South Korean goods again.

Given the time lag in export orders, “shipments to the EU in December-January is the biggest worrisome”, Park said. “But exports to China will likely rebound and may offset the sluggish sales to EU.”

A man disinfects a street as a precaution against the coronavirus in Seoul, South Korea. PHOTO: AP