South Korea's industrial output shrank in October from a month earlier, affected by sluggish activities in the manufacturing sector, a government report showed Friday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries dropped 1.6 percent last month from a month earlier. Compared with a year earlier, it fell 3.2 percent.

Production in the service sector, however, inched up 0.8 percent on-month and expanded 2.6 percent from a year earlier, the report showed.

"When this report was compiled, labor disputes in the automobile sector were still ongoing, which seems to have negatively affected the overall figures," Jeon Baek-geun, head of the agency's short-term industry statistics division, told Yonhap News Agency. "Output of semiconductors used in TV panels also remained sluggish amid less demand from overseas markets."

He said that as the strikes ended and automakers were now operating at full capacity throughout this month, the outlooks for November are relatively optimistic, though it is premature to predict a clear direction due to cloudy economic situations.

The report showed that the manufacturing sector output declined

1.8 percent on-month in October. In particular, production by carmakers grew 5.3 percent from a month earlier but dropped 10.5 percent compared with a year earlier. 

The average facility operating ratio in the manufacturing sector also fell to 73.5 percent, the lowest ratio since May 2009 when it was 73.4 percent. 

Consumption and corporate investment both slumped.

Retail sales dropped 0.4 percent on-month and 0.3 percent on-year. 

Investment in facilities shrank 4.6 percent on-month in October and fell 8.8 percent compared with a year before as corporate spending on transportation equipment and precision machinery declined.

The latest output data intensified concerns over the current economic situations in South Korea. Finance Minister Choi Kyung-hwan earlier said that the Korean economy is improving steadily, but the overall recovery momentum remains weak. 

Observers said that the government will lower its growth estimate for this year when it unveils its economic management plan for 2015 next month, given the toughened economic and market situations. It currently expects the economy will grow 3.7 percent this year, higher than projections made by major think tanks. (Yonhap)