Early South Korea Export Data Hint at Global Green Shoots

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(Bloomberg) -- Early South Korea trade figures for December show monthly exports could decline less than double-digits for the first time since May, offering another sign that the global manufacturing slump may be reaching a bottom.

Exports during the first 20 days of of the month fell 2% from a year earlier, the Korea Customs Service said Monday. Shipments to China rose 5.3%, on course to post the first monthly gain in more than a year.

Semiconductor sales, which account for the largest share of South Korean exports, declined 17%, improving from more-than-20% declines in previous months.

Early South Korea Export Data Hint at Global Green Shoots

Monday’s figures offered support to economists looking for more evidence of green shoots in the global economy after recent improvements in factory data from China to Germany and signs of progress in U.S.-China trade talks. The 20-day trade report is closely watched as an indicator of global demand due to its early release each month and Korea’s key position in electronics supply chains.

“This confirms the view that exports have entered the stage of recovery,” said Park Sang-hyun, an economist for HI Investment & Securities in Seoul. “If the upturn continues, it would be a signal of improvement for not just South Korean exports but global trade and manufacturing.”

For South Korea, a yearlong drop in exports has put the economy on course for its slowest expansion in a decade. A finance ministry official last week said the government is cautiously optimistic that an improving global economy will help fuel a recovery next year.

South Korean imports fell 0.5% in the first twenty days of December from a year earlier. Exports to the U.S. edged down 3.4%, while imports rose 7.9%. Shipments to Japan rose 6.2% as imports dropped at the same pace.

South Korea’s exports during Dec. 1-20 expanded 8.1% from the same period a month earlier, while imports gained 9.1%. Data for the full month is released on Jan. 1.

©2019 Bloomberg L.P.

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