SOUTH KOREA’S factory output in October shrank at its sharpest pace in nearly 1-1/2 years, government data showed yesterday, as global chip shortages continued to weigh on car production.

Industrial output last month unexpectedly fell by a seasonally adjusted 3 percent month on month, Statistics Korea data showed, following a 1.1 percent decline in September and logging the biggest decline since May 2020.

That also missed the 0.4 percent growth tipped in a previous poll of analysts, by a large margin.

“Continued global supply chain disruption is one main factor behind the sluggish data,” Finance Minister Hong Nam-ki said, referring to the auto chip shortage.

A breakdown of data showed production of cars shrank 5.1 percent, while that of primary metal fell 5.9 percent.

“We expect better data in November, reflecting strong exports and a recovery in domestic demand and as the impact from high base fades,” Hong said.

On an annual basis, output grew 4.5 percent, sharply rebounding from a 1.8 percent contraction in September and beating 3 percent growth forecast in the poll.(SD-Agencies)