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Early South Korea trade figures for November show exports could be headed for their smallest monthly decline since April, offering a sign that a year-long stretch of falls linked to weak global tech demand may be starting to ease.
Exports during the first 20 days of November fell 9.6% from a year earlier, the Korea Customs Service said Thursday. While the figures point to a 12th straight monthly drop in exports amid weakness in the global tech sector and a further slowing of China’s economy, a smaller decline offers a sign that the worst may be over.
“The drop is going to start to ease,” said Mun Byung-ki, a researcher at the Korea International Trade Association in Seoul. “The fall in exports last month was likely the biggest for a full month before a recovery. We can expect a return to growth at some point in the first half, even though you can’t guarantee that growth will continue.”
South Korea’s 20-day trade report is closely watched as an indicator of global demand due to its early release each month and the economy’s key position in electronics supply chains. Easing declines in shipments would add to signs of a potential bottoming of the tech slump. Other indications include a drop in South Korean semiconductor inventories in September and better earnings forecasts from Samsung Electronics (KS:005930) and Apple (NASDAQ:AAPL).
The value of Korea’s chip exports, which account for the largest share of its exports, declined 24% in the first 20 days of November compared with a year earlier. Shipments of the devices had dropped more than 30% in each of the previous three months.