By Lee Hyo-sik
Staff Repoter



Key indexes for current and future economic trends fell in September for the sixth straight month, indicating that the Korean economy has entered a double-dip downturn, meaning the economy is reentering a downturn without first going into an upturn.

According to the National Statistical Office (NSO), the cyclical component of the coincident composite index, which reflects the current economic conditions, edged down 0.2 of a point to 96.9 in September from 97.1 in August after falling from 98.1 in July, 98.9 in June and 99.7 in May.

The changes in the leading business index, calculated by dividing the September leading index by the average leading index for the period from March last year to April this year, also dropped by 0.1 of a percentage point to 2.3 percent in September from 2.4 percent in August, marking the sixth consecutive monthly drop.

Changes in index are barometers of business conditions six months in the future.

Economists usually interpret a decline in leading business indicators for over six months in a row as a concrete sign that the economy is entering a state of downturn.

``The Korean economy is suffering from a renewed slump following a brief recovery in the third quarter of last year from the previous downturn, due mainly to prolonged stagnant domestic demand and investments,’’ local economists said.

NSO officials said it is still too early to say whether a drop in economic indicators over the last six months means a temporary downturn before a solid upturn in coming months or a full-scale downward trend.

Industrial output expanded by only 9.3 percent last month from a year ago marking the first single-digit growth in the last eight months as exports of key items such as semiconductors and automobiles have slowed down and sluggish domestic consumption has not picked up, according to the NSO.

Factories were running at an average of 79.7 percent of full capacity in September, up one percentage point from 78.7 while business investments in facilities fell by 0.7 percent from a year ago.

Due to the continuing slump in domestic demand, wholesale and retail sales declined by 0.7 percent in September over the corresponding month last year, representing the three consecutive months of negative growth but up by 0.5 percent from August.

Department store sales slipped by 6.8 percent from a year ago for the seventh consecutive month while large discount stores saw sales rise by 6.4 percent last month, marking a positive growth for the last 19th months straight.

Domestic construction orders dropped by 29.2 percent from a year ago in both the public and private sectors while producer inventories rose 5.3 percent in September from the same period last year and up by 0.8 percent from August.

leehs@koreatimes.co.kr