Gangwon Special Self-Governing Province's economic scorecard for the first half of this year — compiled under the outgoing eighth elected administration — showed a contraction in manufacturing. Attention is now turning to what results the ninth elected administration, which took office July 1, will deliver.
The Bank of Korea's Gangwon branch released its first-half economic review Wednesday, finding that the province's economic conditions held roughly steady compared with the second half of last year.
Service-sector output edged up, while manufacturing and construction both declined. On the demand side, private consumption rose slightly, but facility investment dipped.
The number of employed residents increased modestly in the first half of 2026, though the province's population continued to shrink.
Within the deepening manufacturing slump, medical devices and cosmetics posted gains on the back of expanded distribution networks, while pharmaceuticals, cement, auto parts and food and beverage products — the last hurt by a broader decline in alcohol consumption — all fell.
Manufacturing in Gangwon is expected to improve somewhat in the second half, the Gangwon branch said. Domestic and overseas demand for medical devices and cosmetics, which performed well even in the first half, is forecast to keep rising, while pharmaceuticals are expected to rebound as botox companies that recently expanded their Gangwon investment ramp up exports.
Cement is projected to hold at first-half levels as the construction slump persists, and auto parts face the same outlook as the impact of US auto tariffs continues to weigh on the sector.
Within the service sector, real estate saw a rise in home sales transactions but posted a slight overall decline as move-in volumes and jeonse and monthly rent transactions fell in the first half.
In the second half, service-sector activity is expected to be buoyed by local government efforts to promote tourism, with accommodation and restaurants forecast to perform well. Retail and wholesale trade, however, is projected to weaken as rising petroleum prices gradually spread to related product categories.
Construction, mired in a prolonged slump, is expected to edge up in the second half led by the public sector, the Bank of Korea's Gangwon branch said.
The private sector, however, is forecast to remain at roughly first-half levels despite the resumption of some stalled projects and plans to break ground on an AI data center in Donghae, as a persistent backlog of weak orders continues to drag.
On the consumption side, spending on durable goods edged up as sluggish home appliance sales partially recovered, while semi-durable goods — led by clothing, accessories and leisure products — also rose slightly.
In services consumption, spending on medical services declined, but dining out and leisure-related categories increased.
Facility investment in the first half of 2026 fell slightly compared with the second half of last year. The construction downturn suppressed gains in food and medical device investment, making it the primary drag on overall facility investment.
The monthly average number of employed residents in the first half of 2026 rose by 13,000 from the same period a year earlier, a wider gain than the 8,000 increase recorded in the second half of last year. By quarter, employment grew by 22,000 in the first quarter and by 4,000 in the second.
By sector, the pace of growth in services employment slowed, but manufacturing shifted to positive territory and the rate of decline in construction employment narrowed.
Consumer prices in Gangwon rose 2.6 percent in the first half of this year compared with the same period a year ago.
The province's population stood at about 1.507 million, down roughly 3,000, or 0.2 percent, from a year earlier. Donghae recorded the steepest decline at about 1,300, followed by Gangneung at about 1,200 and Sokcho at about 1,200. Wonju saw the largest gain at about 2,400, followed by Jeongseon-gun at about 1,800. Among those who left, 1,200 were men and 2,200 were women.
abc@heraldcorp.com
