SEOUL, Feb. 1 (Xinhua) -- South Korea's industrial production remained lackluster, with private consumption falling for two straight months amid the lasting political unrest, caused by the impeachment of President Park Geun-hye, a government report showed on Wednesday.
Production in all industries made no change in December from a month earlier, after marking the first rebound in three months in November, according to Statistics Korea.
Output in the mining and manufacturing industries reduced 0.5 percent compared with the previous month. The capacity rate among manufacturers dipped 0.8 percentage points to 73.0 percent in December.
Production in the services sector inched up 0.3 percent due mainly to a one-off effect from the launch of a new mobile game. Activity in the food and restaurant sector declined 0.5 percent on economic uncertainty.
Retail sales, which reflect private expenditure, shed 1.2 percent in December from a month earlier, posting the fall for two straight months.
Falling consumption came amid uncertainties around the political sphere following the impeachment of President Park, which was passed in the parliament on Dec. 9.
Hundreds of thousands of South Koreans have taken to the streets every Saturday night to demand an immediate resignation of the president since the influence-peddling scandal involving Park's longtime confidante emerged in late October.
Bank of Korea (BOK), the country's central bank, said in its biannual monetary policy report Tuesday that political uncertainty negatively affects the services industry, facility investment and private consumption, citing past cases of political uncertainties having a negative impact on the economy.
Higher interest rates also led consumers to tighten their purse strings as it increased the debt-serving burden for households, which are struggling with massive debts, especially mortgage loans.
Lending rates here recently turned upward as the U.S. Federal Reserve indicated three rate increases in 2017 after raising its policy rate by a quarter percentage point in December.
The BOK slashed its benchmark rate from 3.25 percent in July 2014 to an all-time low of 1.25 percent in June last year. It encouraged households to purchase home with borrowed money amid eased regulations on mortgage financing.
Facility investment increased 3.4 percent in December from the previous month as capital spending got strong in special mechanical equipments and semiconductor equipments.
The cyclical factor of leading economic indicators, which reflect future industrial activity, inched up 0.1 point, with the figure for coincident indicators rising 0.2 points compared with a month ago.
For the whole year of 2016, the industrial production increased 3.1 percent from a year earlier. It was the biggest expansion in five years.
The production in the mining and manufacturing industries grew 1 percent. It gained at a lower speed relative to the overall industry as the discontinuation of Samsung's Galaxy Note 7 smartphones and partial strikes in major automakers dampened production in the manufacturing sector.
The factory utilization rate among manufacturers was 72.4 percent in 2016, down 1.9 percentage points from the prior year. It was the lowest since 1998 when the Asian foreign exchange crisis roiled the South Korean economy.
The services industry production increased 3.0 percent in 2016, the fastest expansion since 2011. Retail sales rose 4.1 percent last year, the highest growth in five years.
Facility investment fell 1.3 percent last year, logging the first decline in three years.
