Conditions are not too different for steel, with output shrinking 2.7 percent in March, marking the fifth month in a row that numbers have contracted on a yearly basis.

Reflecting this the number of industries in the mining and manufacturing sector that reported minus output in March vis-a-vis the month before were three times larger than those that said they managed to increase production, the statistical office said.

Of the 75 industries categorized as being part of the mining and manufacturing field, 55 said they lost ground, with 20 saying conditions improved.

In terms of the production conversion index that weighs the number of industries that posted gains against those reporting losses in output, the numbers for March stood at 26.7, the lowest number tallied since 25.3 in October 2014.

"March marked the fifth straight month that industries reporting negative growth exceeded more than half of all sectors in the country's mining and manufacturing compared to the month before. Such a poor showing was last seen in 2008, when corresponding numbers contracted for 13 months as the world at large reeled from the financial meltdown," an official source said.

He added that the manufacturing capacity utilization rate in March stood at just 70.3 percent, down 1.8 percentage points from February and just slightly higher than the 69.9 percent tallied in March 2009.

"The latest utilization rate is the lowest in nine years," he said.

Related to such challenges, local economists warned that the weakening of the country's manufacturing competitiveness could pose serious challenges for Asia's fourth-largest economy.

"There seems to be problems in manufacturing and in particular autos that can exert far-reaching consequences for the economy as a whole since the business is closely linked to numerous companies that not only make cars but supply parts," said professor Sung Tae-yoon of Yonsei University in Seoul.

Others stressed that manufacturing forms the basis of the country's push to capitalize on the fourth industrial revolution, making it imperative for the country to resolve challenges facing this critical sector.

"There is a pressing need to come up with policy measures that can tackle the problems," said Joo Won, a senior research fellow at Hyundai Economic Research Institute. (Yonhap)