South Korean industrial output rebounds just as manufacturing sentiment slides

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South Korean industrial output rose strongly in December having fallen by the most since January 2015 in November.

Over the month production rose by 1.3% after seasonal adjustments, easily beating forecasts for a gain of 0.3%.

The increase followed a 2.1% contraction in November, and was the largest month-on-month expansion since September.

Despite the monthly beat, from a year earlier production fell by 1.9%, below the upwardly revised 0.1% contraction of November.

From a year earlier manufacturing output for the domestic market rose 0.4%, partially offsetting a 3.9% slump in those for international markets.

This suggests that international demand remains weak, remembering that China is South Korea’s largest trading partner.

The industrial production beat followed data earlier in the session which revealed manufacturing entiment in the country fell to a 8-month low heading into February.

The Bank of Korea’s manufacturing business outlook index slid to 67 from 70, falling to the lowest level since June 2015.

It was the third consecutive month that sentiment had deteriorated.

A reading below 100 indicates that the number of companies expecting deterioration in business conditions for the coming month outnumber those seeing improvement.

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