Service Sector Output Falls to Record Low in July


By Bae Ken-min
Staff Reporter
The output of the services industry fell by 1.2 percent in July from a year ago for the largest monthly fall since January 2000, when data began to be collected, as retail sales contracted for the 18th consecutive month.

The National Statistical Office (NSO) reported Monday that the business slump had led parents to tighten their purse strings even for spending on education.

Education services shrank 9.6 percent in July from a year ago to see the worst fall since the NSO started tracking the data in January 2000.

Last month the finance and insurance sector also recorded its first drop in three months.

Retail sales fell by 0.7 percent in July for the 18th month of decline, as food sales declined by 7.6 percent and home shopping sales dropped by 8.8 percent over a year ago.

Car sales decreased 9 percent after a brief upturn in June.

The wholesale business grew marginally by 0.4 percent in July over a year ago following a jump of 1.2 percent in June. Sales of food and tobacco shrank 4.4 percent and that of construction materials by 11.2 percent.

As a result, the combined output of wholesale and retail sales contracted 0.3 percent in a major turnaround from a 1 percent gain in June.

Despite the summer vacation of July, the lodging and restaurant business shriveled 0.4 percent during the month from a year ago. While the hotel and lodging business alone expanded its output by 9.5 percent, the growth slowed from 20.1 percent in June. Sales at restaurants declined by 1.9 percent with a 15.3-percent plunge in bakery sales.

The growth in the output of the shipping and transportation sector noticeably slowed from 9.9 percent in June to 4.3 percent in July. In particular, land transportation marked the first drop in 31 months with a 0.3-percent fall.

The finance and insurance sector dropped into negative territory for the first time in three months as output shrank by 2.4 percent, with a slump in the stock and futures markets.

The real estate and leasing sectors fell by 11.5 percent to mark the seventh month of decline.

The output of entertainment, culture and sports-related service sectors also dropped by 2.2 percent, falling for the fifth straight month.

Public and individual services contracted by 1.8 percent due to a 14.1-percent contraction in beauty-related businesses such as hair salons and public baths.

The telecommunications sector maintained brisk performance, expanding 2.2 percent, although the growth margin decreased. Business supporting services such as computer operation and data processing grew 2.7 percent in July, down from 3.5 percent in June.

kenbae@koreatimes.co.kr