S. Korea output rises faster than expected

SEOUL, (AFP) -South Korea’s industrial output grew faster than expected in January on strong overseas demand, with semiconductor and auto makers leading the way, official figures showed Thursday.

Mining and industrial production increased 4.6 percent from the preceding month following a revised 3.1 percent monthly increase in December, Statistics Korea said.

The January rise was the largest since the same figure in September 2009.

Compared to January 2010, output rose 13.7 percent, faster than a revised 10.6 percent year-on-year increase in December.

Economists polled by Dow Jones Newswires had forecast output would grow 1.4 percent month-on-month and 12.5 percent year-on-year.

The 12-month average leading index -- a key gauge in predicting the economy’s future performance - increased 3.0 percent year-on-year in January, faster than a revised 2.8 percent year-on-year rise in December.

Local manufacturing plants operated at 84.8 percent capacity in January, up 2.7 percentage points from a month earlier. The ratio was the highest since the statistics agency started to compile related numbers in 1980.

The government remained cautious about future economic trends, after figures released Thursday showed inflation hit a 27-month high of 4.5 percent in February.

The increase was due partly to rising crude oil prices caused by unrest in the Middle East, and to rises in local food costs following a foot-and-mouth outbreak.

“Strong recovery of domestic demand and exports were reflected in the January output figures,” said Yoon Jong-Won, head of the finance ministry’s economic policy bureau.

“However, the increase is partly attributable to a jump in output ahead of the (February) Lunar New Year holiday,” Yonhap news agency quoted him as saying.

“We still have to wait and see how such factors as soaring oil prices and the foot-and-mouth disease outbreak could affect those indicators for February.”