S.Korea factory output declines in March

South Korea's industrial output reversed two months of increases in March as Europe's debt crisis depressed exports amid sluggish domestic demand, according to the latest official figures.

Production fell a seasonally adjusted 3.1 percent from a month earlier in March following a revised 0.6 percent gain in the preceding month, Statistics Korea said on Monday.

It grew 0.3 percent year-on year compared with a revised 14.3 percent gain in February.

Jeon Baek-Geun, a director at the statistical agency, said the weak global economic recovery hit audio and video equipment and machinery exports.

Hyundai Securities analyst Lee Sang-Jae said a marked slowdown in exports, a fragile improvement in domestic demand and the petrochemical industry's temporary production halt for a seasonal check-up, likely led to the weakness.

Another analyst said output was expected to remain weak in the coming months, fanning expectations of a rate cut later this year.

"Companies are keeping their inventories at a relatively high level, while plant operations are running low," said Peter Park of Woori Investment and Securities.

"Combined with weak private consumption owing to higher oil prices, this likely will fan expectations of a possible rate cut later this year."

Park said a steady fall in consumers' inflation expectations, renewed concerns about Europe's debt woes and weakening domestic economic growth momentum would also make a rate cut likelier.

-- Dow Jones Newswires contributed to this report --

  • COMMENT: Xenophobia rears its ugly head in Singapore once more Sat, Apr 19, 2014
    COMMENT: Xenophobia rears its ugly head in Singapore once more

    Kirsten Han is a Singaporean blogger, journalist and filmmaker. She is also involved in the We Believe in Second Chances campaign for the abolishment of the death penalty. A social media junkie, she tweets at @kixes. The views expressed are … Continue reading →

  • Driving a $900,000 Porsche 918 Spyder to the future Sat, Apr 19, 2014
    Driving a $900,000 Porsche 918 Spyder to the future

    It’s more than just its inherent speed, or the whooshing noise that fills the cabin like a school choir jamming with James Hetfield. It’s what it represents in an industry full of skeptics. It’s a portal into the future – a time capsule left by some mad scientist born decades too soon. It’s something that shouldn’t exist. And yet it does.

  • COMMENT: Xenophobia rears its ugly head in Singapore once more
    COMMENT: Xenophobia rears its ugly head in Singapore once more

    Kirsten Han is a Singaporean blogger, journalist and filmmaker. She is also involved in the We Believe in Second Chances campaign for the abolishment of the death penalty. A social media junkie, she tweets at @kixes. The views expressed are … Continue reading →

  • 5 Unanswered Questions About Jesus
    5 Unanswered Questions About Jesus

    As Christians worldwide gather for Easter to celebrate their belief in the death and rebirth of Jesus, researchers continue to delve into the mysteries that surround the man. The following are five questions about Jesus that, for now, at least, remain unanswered. In 2008, astronomer Dave Reneke argued that the Star of Bethlehem (a celestial event long associated with Jesus' birth) may have been Venus and Jupiter coming together to form a bright light in the sky. Other researchers have claimed that a similar conjunction between Saturn and Jupiter occurred in October of 7 B.C. Still others have claimed that Jesus was born in the spring, based on stories about shepherds watching over their flocks in fields on the night of Jesus' birth — something they would have done in the spring, not the winter.