South Korea Oct factory output falls most in 10 months on weaker chip production

SEOUL (Reuters) -South Korea’s factory output unexpectedly fell on weaker chip production in October and posted the biggest drop in 10 months, official data showed on Thursday.

The industrial output index fell 3.5% in October from a month earlier on a seasonally adjusted basis, according to Statistics Korea. Economists in a Reuters survey had expected a gain of 0.5%.

The fall came after a gain of 1.7% in September and marked the biggest monthly decline since December 2022.

Production of semiconductors fell 11.4% and machinery declined 8.3%, outweighing a 10.4% jump in electronic components.

On a yearly basis, factory output rose 1.1%, compared with gains of 2.9% in the prior month and 5.2% expected by economists.

South Korea’s economy fared better than expected in the third quarter with the expansion underpinned by exports, backing the case for the central bank to keep rates on hold for a while.

In October, output also fell in the services sector, down 0.9% over the month, marking its first decline since May.

The all-industry output index fell 1.6%, the biggest drop since April 2020.

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