South Korea’s industrial production unexpectedly fell 4.8% month-on-month in August 2026, reversing an upwardly revised 0.5% increase in July. This was the first decline in industrial output in three months and the sharpest drop since May 2020, driven largely by weakness in the automobile sector. Overall manufacturing contracted 5.1%, after a 0.4% gain in July, with production decreasing for both domestic demand (-5.5% vs +1.2% previously) and overseas demand (-0.2% vs +4.1%).
In contrast, services activity rose 0.5% in August, recovering from a 1.4% decline in the prior month. On a year-on-year basis, industrial production unexpectedly fell 2.2% in August, following an upwardly revised 4.0% expansion in July, marking the first annual contraction since May.
