S. Korea's manufacturing sales-to-inventory ratio hits 20-year-high
- 5 years ago
Latest data show the inventory of South Korean manufacturers has hit its highest point in about two decades.
Experts say it's another clear indicator of the country's slowing economy.
Kim Hyesung reports.
South Korea's manufacturing sector inventory-to-sales ratio for December recorded 116 percent, marking the highest level since September 1998.
A rising ratio means a faster build up in inventories than goods sold, usually indicating a slowing economy.
Data from Statistics Korea show the ratio has been spiking since late last year.
After hitting around 107 percent in October, it soared past 1-hundred-11 percent in November.
"The higher ratio signals a slowing economy, and even recession. As inventories grow, companies start producing less, investment shrinks further...leading to an economic contraction. In particular, auto and semiconductor sales have been falling in recent months mainly due to sluggish exports and the slowing Chinese economy."
South Korea's manufacturing sector factory operating rate recorded 73 percent in December, the lowest level in eight months.
As for Korean automakers, shipments plunged seven percent on-month in December while their combined inventory ratio rose six-point-five percent.
Semiconductor shipments dropped five percent while their warehouse stock rose four percent.
Shipments of primary metals, including steel, fell two-point-five percent while inventory jumped more than three percent.
Kim Hyesung, Arirang News.
Experts say it's another clear indicator of the country's slowing economy.
Kim Hyesung reports.
South Korea's manufacturing sector inventory-to-sales ratio for December recorded 116 percent, marking the highest level since September 1998.
A rising ratio means a faster build up in inventories than goods sold, usually indicating a slowing economy.
Data from Statistics Korea show the ratio has been spiking since late last year.
After hitting around 107 percent in October, it soared past 1-hundred-11 percent in November.
"The higher ratio signals a slowing economy, and even recession. As inventories grow, companies start producing less, investment shrinks further...leading to an economic contraction. In particular, auto and semiconductor sales have been falling in recent months mainly due to sluggish exports and the slowing Chinese economy."
South Korea's manufacturing sector factory operating rate recorded 73 percent in December, the lowest level in eight months.
As for Korean automakers, shipments plunged seven percent on-month in December while their combined inventory ratio rose six-point-five percent.
Semiconductor shipments dropped five percent while their warehouse stock rose four percent.
Shipments of primary metals, including steel, fell two-point-five percent while inventory jumped more than three percent.
Kim Hyesung, Arirang News.