SHIPBUILDING SECTOR: INCREASE 22.7%
South Korean exports rose 9 per cent in April from a year earlier – the highest figure for 15 months – as strong sales to the US reinforced hopes of an improved performance this year in this export-dependent economy.
Exports to the US grew 19.3 per cent, while sales to the ASEAN group of nations – which together account for more than a sixth of the country's exports – increased 17 per cent, the trade ministry said on Thursday.
"The US investment cycle is picking up, and Korea is one of the first countries to benefit," said Wai Ho Leong, an economist at Barclays. The bullish data follow the announcement last week that gross domestic product grew 3.9 per cent in the first quarter – the strongest figure for three years.
However, the encouraging export data were tempered by a weaker performance in China, where exports rose only 2.4 per cent. China is overwhelmingly South Korea's biggest trade partner, and the countries are hoping to reinforce this relationship with a trade agreement later this year, but South Korean policy makers are watching closely China's slowing growth and signs of stress in its financial sector. There was an even worse result in the EU, where exports declined 3.2 per cent.
The data had no immediate impact on the stock market, which was closed for a local holiday, but economists responded positively to a reading that was well ahead of the consensus forecast of a 5.5 per cent increase.
"We judge that Korea's high value-added exports to high-income economies should increase, and more than offset weaker low value-added exports to emerging economies," said Kwon Young-sun, an economist at Nomura.
The export figure was helped by a strong contribution from the shipbuilding sector, which recorded an increase in exports of 22.7 per cent. The figure reflects a recovery in orders for large container ships and specialist vessels for the oil and gas industry. But economists treat export figures from the industry with caution because they are strongly influenced by a small number of high-value orders, and can show big swings from one month to the next.
Car exports rose 18.9 per cent, helped by higher average unit prices after Hyundai and Kia launched new models, while semiconductor exports rose 12.3 per cent, driven by strong prices for D-Ram memory chips.
Mobile communications devices – previously a strong contributor to export growth, thanks to Samsung Electronics' surging smartphone sales – recorded export growth of 14.4 per cent, down from a 47.7 per cent growth rate a year before. This week Samsung reported a 3 per cent fall in mobile device sales in the first quarter of the year, while its smaller rival LG Electronics announced an increase of 19 per cent in mobile phone sales.
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