By Lee Hyo-sik
Staff Reporter

Wholesale and retail sales rose 3.8 percent from a year earlier in May, the third consecutive monthly increase, raising hopes for a pickup in domestic consumption.

The figure marks the fastest pace in 28 months since January 2003 when sales, an indicator of domestic demand, jumped by 6.6 percent, the National Statistical Office (NSO) reported Wednesday.

In comparison, sales rose 3.8 percent year-on-year in April and 4.9 percent in March.

Industrial output expanded 4.3 percent last month from a year before, up from a 3.8 percent year-on-year growth in April, as domestic economy-oriented businesses increased their output by 3.1 percent, sharply up from a negative growth of 0.4 percent a month ago.

The seasonally-adjusted output also rose 0.5 percent from a month earlier, bolstered by stronger demand for semiconductors and automobiles.

``The economy has shown some signs of a gradual recovery. But it is too early to say that the economy has entered a full-fledged recovery phase as industrial production and retail sales rose last month mainly on seasonal factors,’’ said Kim Kwang-sup, director at the NSO’s industrial and trend division.

Analysts said that stronger sales figures are positive, but expressed concern over slowing exports.

``Rising wholesale and retail sales and the robust construction sector played a large role in boosting industrial production last month. But the growth figure was not as high as we expected as export growth slowed further from the previous months,’’ said Shin Min-yong, senior economist at LG Economic Research Institute.

``The economy is expected to show a gradual rebound toward the end of the year but rising oil prices and a stronger won may dampen the recovery momentum,’’ Shin added.

Month-on-month, semiconductor output grew 1.9 percent and automobile output rose 3 percent in May.

Exports growth slowed to 4.3 percent year-on-year in May from 7.7 percent in April.

The index of leading indicators, the key gauge of future economic trends, rose by 0.2 percentage point to 1.3 percent in May from a month before. The index posted a monthly 0.4 percentage drop in April.

The coincidence index, which reflects current economic conditions, also jumped 0.2 point to 96.6.

Factories were running at an average of 78 percent of full capacity in May, down from 78.8 percent in April, while producer inventories rose by 0.1 percentage point to 103 percent over the same period.

Corporate investment in industrial and telecommunications equipment expanded 7.7 percent.

Domestic construction orders jumped 53.9 percent last month over a year ago, up from a 29.1 percent increase in April, thanks to rising orders from the public and private sectors.

leehs@koreatimes.co.kr