Third Quarter Service Sector Revenue Decreases for the First Time

For the first time in history, the quarterly revenue for the service sector decreased. The chill of the depression is diffusing into all types of services, such as department stores and local markets alike, as well as restaurants, barbershops, beauty parlors, and public bathhouses.

According to the `Trends of the Service Sector` that the National Statistical Office (NSO) published on November 5, this past third quarter (July to September) recorded a 1.3 percent decrease in the service sectors produce (revenue) compared to the same period last year. This is the first time since NSO has started recording statistical information regarding the service sectors activities that there has been minus growth in the service sector compared to the same period of the year before.

Even by monthly standards, the service sector showed a 0.8 percent decrease in September compared to the same month of last year, and continued the minus streak for three consecutive months. This is the first time the service sector has recorded negative growth for three consecutive months.

In the case of the most exemplary of domestic demand, retail, there was a 2.4 percent decrease, which resulted from domestic appliances and furniture (-9.4 percent) and general retail (-3.6 percent) in September. This is a decrease of 20 consecutive months, dating back to February 2003. Wholesale has also decreased for two consecutive months, and recorded a 0.8% decrease from last September.

As the drop in consumer confidence has been spreading to the middle and high-income groups, expenditures of dining out, education, and cultural activities have also decreased.

The academy business, once thought as a field that was not affected by the depression, has also seen a 13.5 percent decrease from last September and has recorded the largest decrease since statistical records have been recorded.

The restaurant business, which has had such a bad slump that restaurant owners held a “cauldron lid demonstration” on November 2, has had a 0.9 percent decrease, which reflects a decrease for ten consecutive months beginning last December.

Jong sik Kong kong@donga.com