Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semiconductor Industry Sales Trends -- Ignore unavailable to you. Want to Upgrade?

To: Michael Sphar who wrote (67)	8/27/1998 1:12:00 PM
From: Michael Sphar	Read Replies (2) \| Respond to of 105

Here's a rather bearish report on the state of South Korea, but note the semiconductor (DRAM) anomoly. Also heed the final forecast: Sluggishness in Local Demand Deepens 08/27(,¤) 18:32 Deepening sluggishness in domestic demand is casting gloom over prospects for the country's early economic recovery as economic indicators related to production, consumption and investment showed extremely poor results in July. According to a report on July's industrial activity released by the National Statistical Office yesterday, industrial production fell 12.9 percent year-to-year in July. Production was up slightly from the record 13.2 percent drop in June but was a steeper fall than the minus 7.8 percent recorded in the first quarter and the minus 11.6 percent registered in the second. The nation has seen negative growth for seven months in a row since January, when output growth plunged to minus 10.8 percent from a 3.0 percent gain in December, in the wake of austerity measures dictated by the IMF. The production of motor vehicles fell 45.4 percent in July from a year earlier, partly affected by labor strikes at Hyundai Motor Co. Output of machinery equipment and assembled metals were down 39.5 and 29.7 percent, respectively, whereas production of semiconductor chips and special vessels rose 39.2 and 47.7 percent, respectively. Shipments of goods plunged 14.1 percent in July but this figure represented an improvement over the record 14.3 percent fall in June. Shipments of goods for export were up 22.0 percent in July, while those for domestic sale were down 28.9 percent, an indication that rapidly cooling domestic demand arising from pay cuts and layoffs has been the key reason behind weak industrial activity in the first half of 1998. Producer inventory contracted 7.8 percent in July, compared with a 7.6 percent decline in June, as makers of automobiles, machinery equipment and other domestic demand-oriented goods trimmed production in the face of poor domestic sales. Manufacturing plants were operating at 63.7 percent of capacity in July, a record low. ''Had it not been for strikes at Hyundai Motor, the capacity utilization ratio would have reached 64.8 percent in July,'' said Kang Suk-in, director-general of the economic statistics bureau at the NSO. Wholesale and retail sales in July were down 17.4 percent, the biggest drop since the statistics office began releasing the statistics in 1980. In June, wholesale and retail sales fell 16.0 percent year-to-year. Shipments of consumer goods for domestic consumption slid 23.6 percent but this figure was an improvement over the 26.5 percent decline in June. ''Consumers seem to be curtailing consumption more steeply than their incomes have fallen,'' Kang said. On the capital expansion side, local machinery orders, the main indicator of corporate capital spending, decreased 26.8 percent in July from a year ago, narrowing from a 43.6 percent fall in June. But this improvement was prompted mainly by rises in orders from the public sector. Machinery imports, another key investment indicator, contracted 60.7 percent and the aggregate of total facility investment was down 48.9 percent. Local construction orders in July dipped 41.0 percent from a year earlier as builders continued to reel from liquidity woes and declining demand. ''The economy remained on a downward spiral in July owing to deepening sluggishness in domestic demand and production cuts. Nevertheless, production indicators showed slight improvements and the pace of economic contraction will slow through the rest of the year,'' Kang said. The leading composite index, which mirrors the state of the economy several months ahead, edged up 0.1 percent in July from June. But its year-to-year figure was down 3.3 percent, which was the same as June's, indicating that it's too early to predict when the economy will hit bottom. The coincident composite index, a yardstick measuring the current economic situation, dropped 0.8 percent in July from June, following a 0.6 percent decline in June. Economists warn of a further slide, saying a combination of sluggish domestic demand and recent downward pressure on exports will push the economy to the brink of collapse in the months to come. (C) COPYRIGHT 1998 THE HANKOOKILB