(LEAD) Industrial output up 1.6 pct in March, led by chips

(LEAD) industrial output-March

(LEAD) Industrial output up 1.6 pct in March, led by chips

(ATTN: RECASTS throughout with details; CHANGES headline)

By Kang Yoon-seung

SEOUL, April 28 (Yonhap) -- South Korea's industrial output and retail sales gained ground on-month in March, on the back of the semiconductor sector, data showed Friday, while its facility investment fell over the period.

The industrial output advanced 1.6 percent on-month in March, compared with a 0.7 percent growth tallied in February, according to the data from Statistics Korea.

The combined output in the mining, manufacturing, gas and electricity industries moved up 5.1 percent on the back of the chip industry.

The production of semiconductors shot up 35.1 percent from the previous month. The sector's output, however, nevertheless fell 26.8 percent from a year earlier.

An official from the agency said that the sector is still experiencing a downward trend, especially considering that Samsung Electronics Co. recently announced its plans to reduce its production.

The production of automobiles moved up 6.5 percent on-month in March as well, on the back of the stronger demand for eco-friendly models.

The output from the communication and broadcasting devices, on the other hand, lost 31.5 percent over the period, limiting the overall gains.

The service output rose 0.2 percent on-month in March, led by the finance and insurance industry that added 1.8 percent.

Retail sales, a gauge of private spending, increased 0.4 percent over the period, on the back of stronger demand for fuel and electronics, the data also showed.

The agency attributed the growth to warmer-than-usual weather in March, which induced more people to enjoy outdoor activities.

However, facility investment slipped 2.2 percent due to the sluggish performance from the ship sector.

In February, all three major indicators of economic activity -- industrial output, private spending and facility investment -- grew on-month for the first time since December 2021.

The agency noted it is too early to conclude that Asia's No. 4 economy has entered a recovery pace.

"The output from the mining and manufacturing sector has increased significantly, with retail sales and service production also gaining ground," an official from the agency told reporters. "But we believe that it is too early to say that (the economy) has started a full-fledged recovery."

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