Roundup: S. Korea's retail sales fall most in over 4 years on MERS aftermath

Retail sales in South Korea shrank the most in more than four years in the aftermath of the outbreak of Middle East Respiratory Syndrome (MERS), a government report showed Friday.

Retail sales, which reflect private consumption, declined 3.7 percent in June from a month earlier, the fastest slide since February 2011 when the sales in retail stores dropped 5.8 percent, according to Statistics Korea.

Sales in department stores and discount outlets posted a double- digit reduction last month, and convenient store sales inched down 0.2 percent.

Sales in semi-durable goods such as clothes plunged 12.1 percent, leading the June decline. Demand for durables and non- durables like cosmetics dipped 1.6 percent and 1.1 percent respectively.

The MERS outbreak, which began here with the report of the first patient on May 20, infected 186 people, among whom 36 passed away. The outbreak peaked in June when consumers refrained from going outside for shopping or entertainment, dampening the already weakened domestic demand.

The South Korean government declared the de-facto end of the MERS crisis Tuesday as no new case was reported for more than three weeks. Consumers resumed outside activities from mid-July amid public relief over the deadly viral disease.

Production among service companies fell 1.7 percent in June from the previous month due to the MERS shocks, but the production inched down 0.1 percent during the April-June period.

Output in overall industries, including the manufacturing, services, construction and public administration, rose 0.5 percent in June from a month earlier, the first increase in four months.

The industrial output declined 0.5 percent in March, 0.4 percent in April and 0.6 percent in May respectively on a monthly basis, before rebounding last month.

The rebound was driven by production in the manufacturing and mining industries, which gained 2.3 percent last month. Exports kept sliding in June, but the falling pace slowed after posting a double-digit decline in May.

Regular maintenance and renovation of facilities in the oil- refining industry ended last month, driving the sector's production to increase 7.7 percent in June from a month earlier. Production in the machinery equipment and auto sectors rose 5.3 percent and 3.1 percent each.

Manufacturers logged an average capacity rate of 75.2 percent in June, up 2 percentage points from the previous month. Inventory among the companies increased 3.0 percent last month.

Facility investment increased 3.8 percent on rising investment in machinery equipment.

Construction works completed grew 3.9 percent in June on a monthly basis. Construction orders, which reflect the outlook for builders, surged 45.5 percent on a yearly basis on strong demand for public works like public housing, power plants and railway.

The cyclical component of leading economic indicators, which reflects outlook for future business conditions, fell 0.5 points in June from a month earlier, with the figure for coincident economic indicators sliding 0.3 points. Endi