Market Research Report
South Korea Construction Market - Growth, Trends, and Forecast (2020 - 2025)
|Published by||Mordor Intelligence LLP||Product code||937876|
|Published||Content info||150 Pages
Delivery time: 2-3 business days
|South Korea Construction Market - Growth, Trends, and Forecast (2020 - 2025)|
|Published: May 1, 2020||Content info: 150 Pages||
The South Korean construction market is estimated to register a CAGR of approximately 4% during the forecast period.
Korea's construction industry has been a major source of export earnings for the national economy. Between 2007 and 2016, it totaled to USD 538 billion, more than semiconductors or shipbuilding. However, overseas sales fell by 20% between 2016 and 2018.
The construction industry posted a second consecutive year of decline, with its output dipping by 3.2% last year, following a 4% drop in 2018. Fiscal spending jumped by 6.5% on-year in 2019, up from 5.6% the year before, making up shortfalls in other sectors.
The construction value totaled to KRW 293 trillion in 2018, which increased by KRW 1 trillion (0.5%) from 2017. Compared to the previous year, the domestic construction value declined by KRW 0.2 trillion (-0.1%) to KRW 259 trillion in 2018, whereas the overseas construction value grew by KRW 2 trillion (4.8%) to KRW 34 trillion in 2018.
Increase in Construction Permits
This trend is likely to continue as South Korea plans to pour billions of dollars into developing public infrastructure in a stark U-turn for President Moon Jae-in's administration, which is struggling to boost growth despite low-interest rates and a record fiscal stimulus. Seoul will increase spending at state-run institutions by 12% to KRW 60 trillion (USD 51.2 billion) this year, with the bulk of the money set aside for infrastructure building and housing construction. The government had already committed to an 8% increase in budget spending for 2020, compared to last year.
Increase in Contribution of Construction to GDP
Together with strong economic growth over the decades, the construction industry has developed into a world-class operation. Korean EPC companies (engineering, construction, and commissioning) are engaged in large housing, transportation, plant, and commercial ventures, not only domestically but also heavily overseas. Typically, a major Korean EPC is only interested in multi-billion-dollar projects, while smaller but skilled SMEs in the field take a major part in the smaller projects. The industry is going through the contraction phase currently. It is important to note that procurement and decision-making for overseas projects are usually done in Korea.
The report covers the major players operating in the South Korean construction market. The market is fragmented and is expected to grow during the forecast period, due to recovery in the economy and huge investments and projects coming up in the market.