* Due to the imapct of COVID-19 across the economy, the shock on the demand and also supply weakened the manufacturing activities.
- Leading industries in Korea are highly dependent on specific trading partners thus, the manufacuring industry in Korea is vulnerable to the supply chain crises. On the demand side, high dependence on global market and sharp decline in exports led to the contraction in production.
• As of April 2020, manufacturing production decreased by 4.5% YoY and 6.0% MoM, and exports decreased 25.1% YoY and 21.1% MoM.
• Investment sentiment is also greatly reduced, with the Business Survey Index(BSI) falling 15.7% MoM and 21.9% MoM, raising concerns that the sustainable economic growth engine will weaken in the future.
- The domestic market is contracting as a result of social distancing and a decline in economy activity, and increases in inventory are becoming a burden due to the sharp consumption decline demand in global markets.
- Some disruptions have occurred in the global subsidiary system of the manufacturing industry, such as the difficulty in supplying parts due to movement restrictions or containment measures as a response to COVID-19