South Korea experienced a trade surplus of $5.61 billion in November, a notable increase from $3.15 billion in October, as exports rose for the 14th consecutive month while imports contracted, as revealed by government data on Monday. Exports saw a 1.4% increase year-over-year, reaching $56.35 billion.
This growth was significantly fueled by remarkable gains in information technology products, particularly semiconductors, which skyrocketed by 30.8%, and computers, which surged 122.3%. Vessel exports also demonstrated impressive growth, up 70.8%, although car exports and general machinery shipments faced declines of 13.6% and 18.9%, respectively. The overall gains were moderated by "one-off factors" like severe snowfall and labor strikes in the auto sector observed in late November, which caused delays in shipments, according to ING Research. Average daily exports rebounded by 3.6% following a slight 0.2% drop in October; however, the increase was narrowly based, with only five out of the eleven major export items recording growth. When analyzing export destinations, shipments to China saw a slight decline of 0.6%, and exports to the U.S.
fell by 5.1%. Conversely, trade with ASEAN and the EU rose by 0.4% and 0.9%, respectively. Imports dropped by 2.4% to $50.74 billion, driven primarily by a 10.8% decline in energy imports, with crude oil leading the charge with a 16.8% decrease. In contrast, gas imports increased by 6.3%. Non-energy imports saw a minute increase of 0.1%, primarily fueled by an impressive 86% surge in semiconductor and related equipment purchases. However, auto imports took a significant hit, plummeting by 29.4%, while telephone and petroleum imports dropped 32.6% and 18.7%, respectively. ING Research is optimistic about a rebound in exports in the near term as temporary disruptions dissipate, and both car and oil exports recover.
"The increase in capital goods imports, particularly semiconductors, suggests a rebound in equipment investment in the upcoming quarter," the firm noted. While global trade conditions remain uncertain, ING projects that exports will continue to be a key driver of South Korea's economic growth through the first half of 2025, bolstered by potential frontloading ahead of anticipated trade policy shifts..