Korea’s early exports fall further as global demand cools

South Korea’s early trade data showed a deepening slump in exports as global demand for semiconductors remains weak and China’s reopening is yet to generate any boost.

Daily shipments decreased 23.1% on average in the first 20 days of March from a year earlier, the customs office said Tuesday. While total exports fell 17.4%, chip sales plummeted 44.7% and shipments to China tumbled 36.2%.

Korean exports have been declining since late last year as semiconductor prices slid and demand from China weakened. Trade deficits have also continued to mount as energy prices remained elevated and the won deteriorated, pushing up import costs.

Korea is one of the world’s largest exporters, shipping a wide range of goods and serving as a key indicator of the health of the international economy. Global activity has been restrained by rising interest rates and is now at risk from bank stress in the US and Europe.

A decline in sales suggests consumers and businesses are cutting back on spending worldwide. That will have implications for Korea’s economy, which already contracted last quarter.

Among 10 export destinations disclosed by the customs office, the US was the only one that showed increased demand for Korean exports, rising 4.6% from a year earlier. Shipments to Vietnam dropped 28.3% while those to Taiwan sank 53%.

The trade shortfall for March so far amounts to $6.3 billion, according to the customs office. Most products, including steel, wireless communications devices and precision equipment posted a decline in exports. The shipment of automobiles stood out with a 69.6% jump from a year earlier.