South Korea regional economy grows 3.7% led by semiconductors

South Korea's regional economic performance in the second quarter of 2026 shows a significant divide driven by the semiconductor industry. According to experimental statistics from the national data agency, the national Gross Regional Domestic Product (GRDP) increased by 3.7% year-on-year.

Growth was led by regions with strong manufacturing sectors. Chungbuk saw a substantial 11.9% increase due to a 22.4% surge in semiconductor and electronic component production. Gyeonggi and Seoul also recorded growth, with Seoul's expansion driven by the service sector. In contrast, regions like Jeonnam experienced a 2.8% decline as chemical and petroleum refining production fell.

In the Daegu-Gyeongbuk region, GRDP grew by 2.0%, supported by a 5.7% rise in manufacturing. However, the construction sector in this area faced a sharp downturn, with production dropping by over 13% due to a slump in housing and civil engineering projects.

Nationally, construction contract values rose by 27.3% to 80.9 trillion won, reaching 97.8% of the record highs seen in 2022. This increase was fueled by large-scale investments in semiconductor production facilities and energy infrastructure, with private sector contracts rising by 29.1%.