South Korea’s employment growth rate continued to slow down in March. The country’s jobs grew at the slowest pace in two years last month partly owing to a slowdown in the country’s manufacturing sector due to dwindling semiconductor exports, adding to woes for Asia’s fourth-largest economy already grappling with stagnant growth.
Korea’s job additions snapped their nine-month decline in March in the face of an economic slowdown, but most jobs were created for the over-60 age group. The number of employed people came to 28.22 million last month, up around 469,000 from a year earlier, according to the data compiled by Statistics Korea.
The country’s monthly job additions had been slowing for nine consecutive months through February, when it added 312,000 jobs.
In March, the jobless rate edged down 0.1 percentage point on year to 2.9%, marking the lowest level for any March since the agency adopted the current data compiling methods to analyze the job market in 1999.
Despite the strong job market, most of the added jobs, some 547,000, were for people aged 60 and above, reflecting the still challenging job conditions for younger generations. Excluding senior employment, Korea’s job additions moved down 78,000. Those for people in their 20s and 40s lost 86,000 and 63,000, respectively, over the period.
The government attributed the slowdown in payroll gains to the high base effect of last year when the country significantly added jobs thanks to the economic reopening after three years of COVID-19 lockdowns. But the job market was also hit by the economic slowdown and sluggish semiconductor demand, which shaved the country’s main growth driver exports.
Reflecting this, the country’s manufacturing sector lost jobs on-year for the second straight month last month. The sector saw payrolls down 27,000 in February, while the retail/wholesale and transportation sectors also lost 76,000 and 44,000 jobs, respectively.
The overall job creation was led by the health and welfare sector, which advanced 186,000 on year, followed by the accommodation and restaurant industry with 177,000. Information and communications businesses added 65,000 jobs as well.
On the other hand, jobs in the wholesale and retail sectors decreased 66,000, with the construction segment losing 20,000 jobs. The number of jobs in the manufacturing industry also moved down 49,000 over the period, extending losses to a third month amid the sluggish exports.
The country’s outbound shipments fell 13.6 percent on year in March, falling for the sixth consecutive month, mainly due to weak global demand for semiconductors.
In 2022, Korea added an average of 816,000 jobs on year each month, driven by the post-pandemic recovery. The finance ministry earlier said it expects the figure to drop to a mere 100,000 in 2023 due to the slowing economy and the declining population.
The Korean government remains sceptical about any imminent recovery in the country’s job market. The finance ministry earlier projected the country would add about 100,000 new jobs in 2023 versus a gain of 816,000 in 2022.
