S.Korea's manufacturing sector posts biggest job growth in Aug

South Korea’s manufacturing industry accelerated its job growth in August to post its biggest monthly increase in almost a decade, driven by record-breaking export growth.

The sector maintained its year-on-year increase for a 10th straight month, with the addition of 239,000 jobs last month to 4.54 million workers, according to Statistics Korea.

It marked the biggest on-month growth since January 2013.

The industry, accounting for 30% of the country’s labor market, has been ramping up hires since November of last year. On top of strong exports, a slow rise in foreign labor inflow was attributed to continuous job growth following the onset of the COVID-19 pandemic.

Overall, the country’s job market expanded for an 18th consecutive month in August on a yearly basis, with the addition of 807,000 jobs. 

Machinery goods, electrical devices and food manufacturing segments led the job growth, said Gong Mi-sook, a director of social statistics at Statistics Korea. 

South Korea’s exports swelled to $56.7 billion, its strongest number for the month of August. The figure was up 6.6% on-year, according to the Ministry of Trade, Industry and Energy.

Despite the buoyant exports, soaring imports have driven the country's trade deficit to a record low of $9.5 billion in August.

BULGING STOCKPILES

A rise in stockpiles darkens the outlook for the job market as well.

The manufacturing inventories index in Asia's No. 4 economy expanded 18.0% in the second quarter from the previous year after seasonal adjustment, data from to the Korea Chamber of Commerce and Industry showed.

The index has been on the increase since the third quarter of last year, marking its longest spell of quarterly growth since 2017.

The business lobby group warned that the bulging stockpiles would lead to a production cut from the current quarter.

Following the jobs data release, Vice Finance Minister Bang Ki-sun said in a vice ministerial meeting that the pace of employment growth would slow down in the coming months. He cited softening consumption, higher prices and an unfavorable macroeconomic environment.

The unemployment rate dropped by 0.5 of a percentage point on-year to 2.1% in August, its lowest level since the statistics office started compiling the data in 1999 under new standards.

Write to Eui-Jin Jeong and Lucia Sang-Eun Lee at justjin@hankyung.com
Yeonhee Kim edited this article.