New figures indicate a worrying slump in South Korea's manufacturing sector,... once considered the backbone of the local economy.
It's feared a prolonged slowdown could drag the country into a recession... as business sentiment in the sector and the industry's ability to repay their debts erodes away.
Kim Ji-yeon reports.
A slowdown in South Korea's manufacturing sector... namely its traditionally strong shipbuilding and auto sectors suggests the local economy may be heading toward a recession.
Data released by the OECD on Monday shows the composite leading indicator for the country... recorded 99-point-two for July,… zero-point-two point lower than the previous month.
A reading below 100 means an economy is in a downtrend... and it signifies that economic growth in South Korea is slower compared to other OECD member countries.
The indicator has been falling for 16 months in a row now... after hitting a peak of one-hundred-point-nine-eight in March 2017.
The indicator is used by the OECD to predict a country's economic conditions six to nine months down the line... and is based on various data from the Bank of Korea and Statistics Korea on the inventory cycles of the nation's manufacturing sectors as well as business sentiment among manufacturers.
Separate data from Korea's Financial Supervisory Service released on Tuesday shows a sharp monthly increase in the amount of overdue debt owed by small-and-mid-sized companies... meaning their ability to repay loans fell.
The financial watchdog says late loan payments mainly came from subcontractors of large conglomerates in the auto and shipbuilding sectors that endured restructuring.
It says their overdue interest rates rose by zero-point-one-percentage-points from a month earlier to around zero-point-six-percent in late July.
Overdue interest rates overall, including those of conglomerates and households... maintained their previous level, edging up by less than zero-point-zero-five-percent in July.
Kim Ji-yeon, Arirang News.