South Korean and Japanese Industrial Outputs Diverge in May

South Korea and Japan reported contrasting industrial production data for May 2026, reflecting divergent pressures on their manufacturing sectors. In South Korea, industrial output fell 0.3%, the second straight monthly decline following a 0.4% drop in April. This downturn was led by a 10% decrease in semiconductor production and a 17.5% decline in pharmaceutical products. However, automobile production rose 2.7%, and oil refining surged 9.8% due to crude supply disruptions linked to a war in Iran.

Lee Doo-won, a senior official at the Ministry of Data and Statistics, maintained that the chip sector's fundamentals remain strong despite the production adjustments. Other South Korean indicators showed a 1.3% growth in the service industry and a 3.8% increase in completed construction, though facility investment dipped slightly by 0.1%.

Conversely, Japan's industrial production rose 0.5% month-on-month in May, marking its second consecutive month of growth. This expansion was driven by the chemicals sector and transport equipment, particularly overseas demand for aircraft engine parts. Despite the monthly gain, Japan's production declined 1.7% on a yearly basis, the first annual drop in six months. The Ministry of Economy, Trade and Industry noted that eight of 15 sectors declined, including electrical machinery, but projects a 3.7% climb in June.