The 4th Corona virus that hit restaurants again… Hong Nam-gi is better than before Kang Jin-gyu’s data

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It has been confirmed that the 4th COVID-19 pandemic, which started last month, has had a major impact on the production of the hospitality and restaurant industry, a representative face-to-face industry. Face-to-face industry production, which had been recovering this year, turned to a downward trend. Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki evaluated this as “the extent of the decline has significantly decreased compared to the previous period of spread.”

July restaurant industry production -5.2%

According to the ‘Industrial Activity Trends in July’ released by the National Statistical Office on the 31st, the production of accommodation and catering services decreased by 4.8% compared to the previous month. This year, after showing an increase every month, it reversed to a downward trend for the first time. By industry, restaurant and pub production fell 5.2%. The decline was sharply reversed from an increase of 1.7% in May and 2.5% in June. As the 4th pandemic, in which the number of confirmed COVID-19 cases surged since the beginning of last month, has become a reality, it is interpreted that the impact is being realized mainly in the face-to-face industry. In particular, it was found that the restaurant industry, which was hit hard by the 4th stage of social distancing in the metropolitan area, was hit hard by restrictions on the number of people and business hours.

Production in the lodging industry fell by a smaller 1.5%. Production in the hotel industry (-3.3%) and inn (-5.2%) fell sharply. Another face-to-face industry, arts, sports, and leisure (-5.5%), also saw a decrease in production.

Deputy Prime Minister Hong said on his Facebook page on the same day, “Although the impact of the face-to-face service industry, such as food and accommodation, was inevitable, the decrease has significantly decreased compared to the previous period, and it is noteworthy that the overall service industry production continued to increase.”

In fact, service industry production increased by 0.2%. The wholesale and retail industry increased by 1.7% due to increased sales of food and beverages, entertainment and hobbies, and information and communication (2.7%) production also increased due to the launch of new games and increased demand for security-related software.

Mining and manufacturing production also increased 0.4% from the previous month. This is the second consecutive month of increase following the 2.3% increase in June. The manufacturing sector remained flat at 0.0%. Semiconductor production increased 1.6%, while automobiles fell 3.9%.

Decrease in all industrial production due to the base effect of public administration

Production in the service industry and mining industry increased slightly, but production in all industries decreased by 0.5%. All industrial production declined in April (-1.3%) and May (-0.2%), then rebounded in June (1.6%), but turned negative again in July.

This is due to a significant decrease in production in the public administration sector led by the government. Public administration decreased by 8.3%, the largest decline since March 2013 (-9.8%) in 8 years and 4 months. The National Statistical Office explained that it was affected by a decrease in vaccine purchase-related spending in July compared to the previous month. The Ministry of Strategy and Finance explained, “Production in the public administration sector tends to be concentrated at the end of the quarter.” In fact, even in April, the first month of the second quarter, public administration production decreased by 7.8% from the previous month. On the other hand, in January, the first month of the first quarter, it showed an increase of 4.7%.

The retail sales index (seasonally adjusted), which shows consumption trends, decreased 0.6% to 119.3 (2015 = 100). Retail sales also declined for the first time in two months since May (-1.8%). Sales of semi-durable goods such as clothes fell 2.7% due to a decrease in clothing sales due to a decrease in going out such as strengthening social distancing.

Facility investment increased by 3.3%, returning to an increase for the first time in three months since April (3.1%). Construction completion rate decreased by 1.9%.

The coincident index, which represents the current economy, was 101.3, up 0.1 point from the previous month. The cyclical change in the leading index, which predicts the future economy, was recorded at 102.6, down 0.2 points. The cyclical value of the leading index continued to rise from June last year to June this year, but then turned downward for the first time in 14 months last month.

Eo Woon-seon, director of economic trend statistics at the National Statistical Office, said, “In July, production and spending deteriorated compared to the previous month, so the economic improvement showed a slight slowdown.” However, given that production in the mining and service industries is brisk and the decline in retail sales is not large, he said, “The economy showed a better trend than we feared.”

The problem is that the fourth wave of Corona is prolonging. Eh also added, “As the corona virus is getting longer, we are concerned that the improvement of the small business situation will be delayed.”

By Kang Jin-gyu, staff reporter [email protected]

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