Korea’s Factory Output Jumps 9.9% in September as Capacity Use Reaches 76.8%
South Korea’s manufacturing output jumped 9.9% in September from August, the Ministry of Data and Statistics said on 30 October, more than reversing the previous month’s fall.
In The Edge’s reading, September looks more like a recovery from a weak August than a new acceleration. All-industry output rose 3.0% on the month and 1.9% over the quarter. Factories ran at 76.8% of capacity, the highest rate in the release’s table.
The year-on-year picture is cooler. All-industry output was up 1.1% on September 2025, a month in which it had grown 8.0% from a year earlier.
Manufacturing more than recovers August’s fall
The seasonally adjusted manufacturing index reached 128.9 (2020=100). That is 4.5% above its July level, so the rebound did more than fill the August gap.
The all-industry index rose to 122.7, 1.8% above July. Industrial production as a whole climbed 9.0% on the month and construction 5.8%. Services added 0.5%, while public administration fell 4.4%.
Shipments rose 6.3% on the month but were 1.2% lower than a year earlier. Inventories grew 0.8% on the month and stood 7.0% above September 2025.
The inventory-to-shipment ratio, however, improved to 96.5 from 101.8 in August, as shipments grew faster than stocks during the month.
Manufacturing capacity utilisation rose 5.6 percentage points to 76.8%. That is 4.2 points above the 2025 average of 72.6%. The ministry’s capacity utilisation index, a separate measure, was still 2.8% lower than a year earlier.
September 2026 at a glance (in %)
| Indicator | On month | On year |
|---|---|---|
| All-industry output | 3.0 | 1.1 |
| Manufacturing | 9.9 | 1.6 |
| Services | 0.5 | 1.8 |
| Retail sales | 3.6 | -0.4 |
| Equipment investment | 5.3 | 10.1 |
| Construction completed | 5.8 | -1.6 |
Changes on the month are seasonally adjusted; changes on the year are not. Construction completed is at constant prices.
Change on the month, seasonally adjusted (in %)
| Indicator | Jul | Aug | Sep |
|---|---|---|---|
| All industry | 0.1 | -1.2 | 3.0 |
| Factory output | 0.7 | -4.9 | 9.9 |
| Services | -1.3 | 0.7 | 0.5 |
| Retail sales | -2.5 | -1.8 | 3.6 |
| Equipment | 7.4 | -9.7 | 5.3 |
August and September figures are preliminary. Equipment is the equipment investment index.
Manufacturing capacity utilisation (in %)
| Period | Rate |
|---|---|
| 2025 average | 72.6 |
| Third quarter 2025 | 73.1 |
| Third quarter 2026 | 74.3 |
| July 2026 | 74.9 |
| August 2026 | 71.2 |
| September 2026 | 76.8 |
Quarterly and annual figures are averages as printed in the release.
Machinery orders rise faster than equipment spending
Equipment investment rose 5.3% on the month after a 9.7% fall in August. It was 10.1% higher than a year earlier. Machinery investment rose 22.2% on the year, while transport equipment fell 16.4%.
Over the quarter, equipment investment grew 6.3% from the second quarter and 16.4% from a year earlier. Domestic machinery shipments rose 19.0% on the year in September.
Orders are running ahead of spending. The value of domestic machinery orders, at constant prices, rose 28.2% on the year, led by private orders, up 46.7%. Orders from manufacturers rose 71.7%, while public orders fell 68.8%.
Construction moved the same way on the month but not on the year. Work completed at constant prices rose 5.8% on August but fell 1.6% on September 2025. Civil engineering grew 15.9% on the year and building fell 7.7%.
Construction orders received, at current prices, jumped 49.8% on the year. Civil engineering orders rose 84.5% and building orders 41.4%.
Shoppers and services trail the factory rebound
Retail sales rose 3.6% on the month after falls in July and August, but were 0.4% lower than a year earlier. Over the third quarter they fell 1.0% from the second.
Services output grew 0.5% on the month and 1.8% on the year. The quarterly gain was 0.3%, against 3.9% for industrial production.
The statistics ministry’s composite indicators send a mixed signal. The cyclical component of the coincident index rose 0.5 points to 102.2, a fourth straight monthly rise.
The composite leading index itself rose 0.2% on the month. Its cyclical component, which the statistics ministry uses to anticipate turning points, slipped 0.1 points to 104.1. That is its first fall in the eight months shown in the release.
Year-on-year rates stayed modest against a strong base, shoppers are still spending less than a year ago, and the cyclical part of the leading index has turned down, even as the index itself edged higher.
The finance ministry stands ready to steady the bond market
Deputy Prime Minister and Minister of Finance and Economy Lee Hyoung Il chaired an Expanded Meeting on Macroeconomic and Financial Stability on 29 October. The heads of the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service took part.
The ministry pointed to solid fundamentals, citing third-quarter GDP growth of 1.0% on the quarter, as set out on 27 October, and growth projected in the mid-3% range this year. It also said the domestic stock market had seen heightened volatility, with repeated sharp declines and rebounds.
On Treasury bonds, it said the market had shown signs of stabilising. If needed, it will use market stabilisation measures, including emergency buybacks of Korea Treasury Bonds, in coordination with the other authorities.
The November issuance plan, published the same day, schedules competitive auctions of KRW 12 trillion ($8.99 billion), the same total as the October plan. The 30-year auction rises to KRW 2.0 trillion from KRW 1.8 trillion. The 2-year auction falls to KRW 1.8 trillion from KRW 2.1 trillion.
The scheduled buyback is smaller. The ministry plans to repurchase KRW 2 trillion ($1.50 billion) of bonds on 18 November. October’s plan had set the buyback at KRW 3.5 trillion.
Treasury bond plans, October and November 2026 (in KRW billions)
| Item | October | November |
|---|---|---|
| Competitive auctions | 12,000 | 12,000 |
| 2-year | 2,100 | 1,800 |
| 3-year | 2,400 | 2,200 |
| 5-year | 2,200 | 2,300 |
| 10-year | 2,100 | 2,200 |
| 30-year | 1,800 | 2,000 |
| Buyback | 3,500 | 2,000 |
From the plans dated 1 and 29 October 2026; November’s 3-year and 10-year lines each combine two issues of 1,100. October’s total includes a 100 inflation-linked auction; the 20-year and 50-year lines are not shown.
The 3-year Treasury yield was 3.715% on 30 October. The Bank of Korea’s base rate stands at 3%, as set out on 22 October.
The meeting’s agenda also covered the burden on vulnerable borrowers. The ministry said recent rate increases are reaching lending rates with a lag, and that it will carry out previously announced support measures and prepare more if needed.
A roadmap to shorten the equity settlement cycle from two days to one was also on the agenda. From next week, institutions including the Korea Exchange and the Korea Securities Depository will seek feedback on it from financial firms and investors.
What to watch:
2 November 2026: the 2-year Treasury bond auction of KRW 1.8 trillion opens the November schedule.
3 November 2026: consumer prices for October.
18 November 2026: the KRW 2 trillion Treasury bond buyback.
30 November 2026: industrial statistics for October.
Method: index ratios, differences, sums and counts not printed in the releases are The Edge’s calculations from the ministries’ tables; dollar equivalents use the won’s closing rate of 1,334.3 per dollar on 30 October 2026 as published by the finance ministry; prose figures are rounded, tables exact.
Primary source: Ministry of Data and Statistics, Monthly Industrial Statistics in September 2026, 30 October 2026; Ministry of Finance and Economy, Treasury Bond Issuance Plan, November 2026, and Expanded Meeting on Macroeconomic and Financial Stability, 29 October 2026.
Sources: Ministry of Data and Statistics, Ministry of Finance and Economy, The Edge.
