South Korea's factory output falls, inventories grow

South Korea's factory output shrank in October for the third month in four while producer inventories of finished goods swelled by the most in nearly two years as Europe's slump sapped already cooling global demand. The industrial output index fell a seasonally adjusted 0.7 percent in October from September while growing 6.2 percent from a year earlier, Statistics Korea data showed on Wednesday.
Analysts said the weaker-than-expected production was far from shocking but boded ill for Asia's fourth-largest economy, reliant on exports for growth as consumer spending at home remains depressed under heavy and growing household debt. "The weak numbers clearly show the economy is losing steam and what's more important is that we don't know yet the exact scope of the impact from Europe's ongoing troubles," said Lee Jung-joon, fixed-income analyst at HMC Investment and Securities.
Median forecasts from a Reuters survey were for the index to grow a seasonally adjusted 0.2 percent in October from the previous month and by 5.5 percent from a year earlier. In September, the index rose by a revised 1.2 percent over a month before and by a revised 6.9 percent over a year earlier.