Korea early exports surge as vaccines spur global reopening

South Korea’s early trade data show exports are set to surge in May as vaccinations allow a broader reopening of major economies.

Exports gained 53.3% in the first 20 days of the month from a year earlier, the customs office reported Friday. Average daily shipments increased 59.1% in the period which had half a business day less than a year earlier. The readings were partly boosted by last year’s deep slump when the pandemic hobbled global trade.

As the world seeks a return to normalcy, Korea is seeing a rise in demand for export products beyond its cash cow—memory chips—with sales also growing in cars, wireless devices, and machinery. The country’s recovery from the pandemic has been driven by exports, and President Moon Jae-in sees potential for more-than-4% economic growth in 2021.

Korea’s 20-day trade figures offer early signals on the health of global commerce due to its timely release and as its manufacturers are positioned widely across supply chains. The latest report offers more evidence of increased economic activity in the U.S., the European Union and other key export markets.

What Bloomberg Economics Says…

“Stripping out base effects illustrates the strength in underlying demand. Compared with the same period in 2019, South Korea’s daily shipments were up 26% on average.”

—Justin Jimenez, Asia Economist

Exports to China, Korea’s largest overseas market, rose 25.2% between May 1-20 from a year earlier. Shipments to the U.S. jumped 87.3%, while those to the EU were up 78.1% and those to Japan increased 30.6%.

“Demand appears favorable, with the global supply chain emerging from a pandemic hit,” said Kim Jin-myoung, an economist at Hanwha Investment & Securities Co. “There’s growing demand particularly from the U.S. in terms of both consumer and industrial goods.”

Semiconductor shipments increased 26%. Exports of cars and oil products both more than doubled, while sales of wireless communications devices rose 64%.

Korea’s overall imports rose 36% in the first 20 days of May.