Korean Economy, Housing and Lumber Shipments
Economic Update: The South Korean economy grew slower than earlier forecast in the first quarter of 2013 as consumer spending remained subdued and export growth slowed amid the yen’s slide to the won.
South Korea’s real gross domestic product grew 0.8% advancing 1.5% on-year in the first quarter.
The government is ramping up efforts to bolster the economy, which the yen’s slide threatens to weigh on. The yen has depreciated more than 14% per the U.S. dollar so far this year, putting South Korean exports at a disadvantage in pricing in overseas markets. The won has advanced some 11% against the yen so far this year.
South Korea’s exports showed 3.0% increase while imports showed 0.8% contraction in the first quarter. Among many sectors, the construction sector grew the most posting a 4.0% growth as both construction of buildings and civil engineering expanded.
Private consumption was lowered 0.4% quarter-on-quarter (qoq) but facility investment rose 2.6% qoq. Construction investment climbed 4.1% qoq, driven by residential building and civil engineering.
The country’s jobless rate stood at 3% in May, down from the previous month’s 3.2%. Consumer prices grew zero percent month-on-month, seeing no rises for three consecutive months after a 0.2% decline in March and a 0.1% decline in April, showing signs of deflation.
The dollar closed at 1,075.07 won on June 26, 2013, down 2.77 % from 1,105.70 the same date in 2012 and up 1.00 % from 1,064.42 one month earlier.
Housing Construction: Korea’s housing starts in the first four months of 2013 decreased 11.8% to 25,996buildings from a year earlier 29,459 buildings.
The number of wood building permits and wood building starts for the first four months in 2013 also decreased 9.2% to 3,581 buildings and 6.4% to 3,207 buildings respectively compared with the same period in 2012. However, the wood building permits and starts showed a sign of recovery from April showing 1.7% and 10.4% respective increases compared with the same month in 2012.
The real estate market in South Korea, which suffered from a long slump, is showing signs of recovery after the government’s announcement of new stimulus measures in April.
The centerpiece of the measures is to give tax breaks to both home sellers and buyers so that real-estate transactions can be revitalized.