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SEJONG, March 29 (Yonhap) -- South Korea's industrial output shrank for the second straight month in February, intensifying worries that industrial activities might be slowing due to toughened economic conditions, a government report showed Friday.
According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries dropped 0.8 percent last month from a month earlier. It is the second straight on-month contraction following a revised 1.2 percent fall in January.
The output also shrank 9.3 percent from a year earlier, a sharp turnaround from January's 7.6 percent expansion. The service-sector output, however, gained 1.7 percent on-month in February, the report showed.
"The statistics indicate that our economy continues to walk sideways struggling with difficult situations," said Park Seong-dong, head of the agency's economic statistics bureau.
South Korea's economy is faced with rising uncertainty at home and abroad as the global slowdown is making a dent in its exports. Domestic demand also remains in a slump, raising concerns that the country's economy might fall into a long-haul downward path.
Adding to the concerns, the government on Thursday sharply cut its growth outlook for this year to 2.3 percent from 3 percent predicted in December. It also plans to prepare an additional budget aimed at boosting job creation and propping up the slowing economy.
South Korea's gross domestic product grew less than 1 percent on-quarter for the seventh straight quarter, which is the longest streak of such low growth rates. The economy grew 2 percent in 2012, the slowest gain in three years.
Exports remained weak. The central bank earlier said that exports declined 7.9 percent on-year to $42.22 billion in February.
Finance Minister Hyun Oh-seok earlier expressed a pessimistic view of the economy, saying that the future economic conditions are "not favorable" and there is "little chance" that exports will bounce back significantly anytime soon.
The sluggish production figure in February is blamed in part on the manufacturing sector, whose output shrank 1.2 percent on-month and dropped 9.8 percent from a year earlier, the report showed.
Production of semiconductors and parts dropped 4 percent on-month. Compared with a year earlier, automobile and machinery equipment output plunged 16.5 percent and 20.7 percent, the report showed.
The average facility operating ratio in the manufacturing sector slowed to 77.8 percent, down 0.9 parentage point from January. This marked the lowest level since October 2012 when it fell to 77 percent.
Business sentiment seems to remain fragile in the face of murky market conditions.
Though facility investment gained 6.5 percent on-month in February, it plunged 18.2 percent compared with a year earlier, the report showed. The on-year shrinkage is attributed to sluggish investment in machinery, electric and electronic equipment.
Consumer spending slightly improved. Wholesale and retail sales rose 1.5 percent last month from a month earlier, a turnaround from a 1.7 percent decline in January. It also inched up 0.6 percent from a year earlier, the report showed.
Citing the latest production data, the finance ministry said that the economy seems to be going into a prolonged slowdown in the face of persistent uncertainty.
The ministry said that it will carry out a set of policy plans unveiled on Thursday "without a hitch" to induce economic recovery, while at the same time keeping tabs on domestic and overseas economic developments.
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