Service sector production rose 4.5% in the second quarter of this year, marking the largest increase in 13 quarters since the first quarter of 2023.

Driven by the boom in the semiconductor industry, research and development sector production surged 27.4%, recording the highest growth rate since statistics began being compiled in 2000, while engineering research and development also grew 33.9%. Professional design services production increased 22.7% as well. The accommodation and food service sector (1.6%) and non-alcoholic beverage shops such as coffee shops (5.3%) also grew together, driven by an increase in foreign tourists and the distribution of high oil price relief subsidies. However, air passenger transport declined 5.3% due to reduced demand following rising oil prices.

While the overall service sector showed strong performance, retail sales by store format diverged significantly. Total retail sales in the second quarter increased 2.4%, continuing a four-quarter consecutive growth streak and breaking a 13-quarter streak of declines that began in the second quarter of 2022. Department store retail sales grew 14.8%, posting the largest increase in 18 quarters since the fourth quarter of 2021, while convenience stores also rose 3.6%, recording their highest figure since the second quarter of 2022. Retail sales of clothing, footwear, and bags increased 7.0%, marking the largest gain in 13 quarters, and pharmacies, cosmetics, and other goods retailers posted a growth rate of 8.5%. This upward trend is attributed to factors such as a boom from foreign tourists, expanded consumption of overseas famous brands, and recovering consumer sentiment.

However, hypermarkets and fuel retailers (gas stations, etc.) recorded their steepest declines since statistics began being compiled in the second quarter of this year. In particular, hypermarket retail sales fell 9.4% year-on-year, marking the largest decline since 2010. The main cause of the sales drop was cited as Homeplus temporarily suspending operations at 37 of its 104 stores in May and deciding to close those stores in June. Subsequently, when the court decided on July 3 to terminate Homeplus's corporate rehabilitation proceedings due to funding issues, the remaining 67 stores also entered temporary closure. However, after the termination was canceled following emergency funding from Meritz Financial Group, the 67 stores reopened on July 7. The National Data Office explained that the increase in Homeplus store closures affected the decline in hypermarket retail sales.

Fuel retailer retail sales also fell 6.3%, recording the largest decline since statistics began being compiled in 2010. This is attributed to international oil price rises driven by the Middle East conflict, as well as reduced fuel demand due to the implementation of an alternate-day driving system for public institution vehicles. The National Data Office stated that declining gas station sales were the main factor behind the overall drop in fuel retailer sales.