Retail sales increased 0.5 percent on-month, compared with a 0.7 percent on-month gain in June. They rose 6 percent on-year.

Facility investment continued to decline, falling 0.6 percent on-month, following a 7.1 percent on-month drop in June and marking a decline for five straight months.

For all industries, production gained 0.5 percent on-month in July, following an adjusted 0.7 percent on-month fall in the previous month. On a yearly basis, industrial production rose 1.2 percent, the data showed.

The statistics office said a rise in petrochemical production and other sectors offset a fall in autos last month.

Production of vehicles fell 4.9 percent in July from a month earlier, while petrochemical production gained 2.2 percent.

Its average factory operation rate stood at 74.3 percent, up 0.9 percentage point from a month earlier.

"The slump in facilities is mainly due to the completion of massive investments by major chipmakers," a statistics office official said.

"Despite a correction in facility investment, the country's overall industrial output rebounded on the back of a rise in production in the mining and manufacturing sectors," the finance ministry said.

The government said a recovery in the global economy and sound exports are positive, but there are risky factors, such as additional interest rate hikes in the United States and the trade tussle between Washington and Beijing, amid weak job conditions. (Yonhap)