South Korea's industrial output rose for the first time in four months in June mainly due to greater demand for refined petroleum and machinery equipment products, a government report showed Friday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries gained 2.3 percent last month from May. The increase marks a rebound after three straight months of minus growth and is the sharpest growth since February when numbers also hit 2.3 percent.

Compared with a year earlier, industrial production was up 1.2 percent.

"The rebound was helped by improving exports, resumption of normal operations at local refineries that were closed for regular maintenance in May and companies expanding capacity in electronics," said Jeon Baek-geun, director of the short-term industrial statistics division.

The official said that automobile production was up 3.1 percent last month from May.

Outbound shipment numbers for Asia's fourth-largest economy were down just 2.4 percent on-year in June from more than a 10 percent drop tallied the month before.

Production in the service sector, a key part of the economy, contracted 1.7 percent from May but rose 0.7 percent from a year earlier, the report showed. The monthly decrease was attributed to the outbreak of Middle East Respiratory Syndrome that affected domestic spending in such areas as the hospitality and retail sectors.

For all industries, output moved up 0.5 percent from the previous month and gained 1.2 percent vis-a-vis a year earlier.

The latest data then showed the construction sector continued to fare well, expanding 3.9 percent on-month and 0.5 percent vis-a-vis June 2014.

"Construction is being fueled by investments pouring into large infrastructure projects, such as the building of various facilities for the 2018 PyeongChang Winter Olympics," Jeon said.

The factory utilization rate gained 2 percentage points on-month to 75.2 percent, although inventory in the manufacturing sector rose 3 percent on-month and 5.8 percent compared with a year earlier.

Business investment, another key barometer of growth, was up 3.8 percent on-month as companies spent more on general machinery purchases and transportation equipment. From the year before, investment surged 11.9 percent.

Orders placed on domestic machinery jumped 6.6 percent on-year, which can be interpreted as a sign that companies are moving to expand capacity, according to the report.

The finance ministry said that June's output numbers reflected positive gains in manufacturing and facility investments. It, however, said growth was tempered by the MERS shock that caused the country's service sector to contract in the second quarter.

"The impact of MERS on retail businesses was particularly severe," it said.

On future prospects, the ministry said that with MERS having come under control, domestic consumption should rebound in the coming months.

"Sales reported by large discount chains for late July showed conditions returning to normal for the most part although a drop in foreign visitors could delay recovery for the service industry," it said.

In addition, the ministry said there is a need to keep close tabs on uncertainties surrounding China's stock market and a possible hike in U.S. interest rates that could fuel economic uncertainty and hurt industrial production. (Yonhap)