By Christine Kim and Cynthia Kim
SEOUL (Reuters) - South Korea's industrial output rebounded by a seasonally adjusted 1.4 percent in July from June, data showed on Wednesday, beating market expectations as production of electronic components and cars boosted activity.
The median forecast in a Reuters survey of analysts was for output to decline 0.6 percent from June.
The June reading was revised to a 0.4 percent fall from May, down from a preliminary 0.2 percent decline estimated earlier.
"Temporary factors played a big part in today's numbers as we saw liquid crystal display exports rise because of the Olympic Games," a finance ministry official told reporters after the data was issued.
Electronic parts production rose 6.4 percent on-month in July while car output gained 3.7 percent over the period.
"Exports have been improving at a very slow pace but that has also been aiding production," he added.
August exports data is due on Thursday. The same Reuters poll projected a 0.6 percent rise, which would be the first gain in 19 months.
Moon Jung-hui, an analyst at KB Investment & Securities said he expected to see mild gains in output until year-end but the pace of improvement would be fairly slow.
On an annual basis, industrial output gained 1.6 percent, improving from a revised 0.8 percent increase from June.
The average factory operation rate in July was 73.8 percent, a 4-month high.
Meanwhile, service sector output declined 0.7 percent from a month earlier, slipping from a 1.0 percent gain in June and breaking a five-month rising run.
It was the first and worst fall since a 1.2 percent drop in January this year, but the finance ministry official said the decline was on base effects and services were expected to keep improving.