H. Yoo
Research expert covering South Korea
Construction materials industry in South Korea - statistics & facts
The construction industry is one of both high-risk and high returns. It often feels the harsh consequences of shocks in related markets, such as in real estate, and is highly sensitive to changes in the global supply chain. The South Korean construction industry is marked by several leaders and a developed construction materials market. However, as living standards have changed over time, so have demands for the types of buildings constructed and the materials required for their construction. Indeed, external factors like climate change and updated environmental safety standards have mandated significant changes in the construction materials market.
Construction material cost and supply
Supply chain disruptions from geopolitical tensions as well as a slowing real estate market have slowed orders and increased costs overall. The construction cost index in South Korea has seen a near continuous rise in the last two years, and the domestic supply price index of intermediate construction materials skyrocketed from 2020 to 2023. The main construction materials produced domestically are steel and limestone. However, South Korea's developed chemicals industry has also allowed for the creation of a well-established advanced materials market. This has come to benefit the construction materials market through the production of safer, more durable materials with simpler installation.Advanced materials for construction
Improved safety standards have also increased demand for more advanced construction materials. Fires and carbon monoxide poisoning cases in the past have motivated the switch from gas to electrical stove tops, as well as fire-resistant insulation material for walls. Indeed, South Korean exports of more recent construction materials, such as PVC flooring and fiberglass, have generally increased in the last decade. One such example of improved materials, Gypsum Tex, was developed for more flame-retardant ceiling panels. KCC, as one of the biggest construction material companies domestically, is also the only producer of Gypsum Tex in the country. With the need to renovate older buildings, such as the government’s plan to remove asbestos from ceiling materials in all school buildings by 2027, demand for such materials will likely increase.Outlook on the construction materials industry
As South Korea continues to develop, the rising number of completed construction orders will likely be followed by a growing demand for better construction materials for renovating older, existing buildings. As climate change brings in more extreme weather conditions and natural disasters, materials to withstand such conditions will become more in demand. Further, smart building strategies to reduce waste and eco-friendly materials will gain attention as the construction industry is still responsible for a sizable amount of greenhouse gas emissions. The future of the construction materials industry will likely depend on a combination of these shifting environmental factors and consumer demand.
