H. Yoo
Research expert covering South Korea
Construction in South Korea - statistics & facts
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South Korean construction companies have long been associated with well-known projects worldwide, the most notable being the Burj Khalifa skyscraper in Dubai. South Korea’s construction sector, which includes global juggernauts such as Samsung C&T and Hyundai E&C, is tightly married to the real estate and financial sector, directly affecting and being influenced by the state of the market. Its dependency on the fluctuating cost of raw materials and regulatory changes also makes it akin to a barometer for the overall economy. In 2023, the construction sector contributed around 90 trillion South Korean won to the country's GDP. Domestically, this market is considered mature, with slower productivity being reflected over time.
Overseas prospects for growth
The slowing of the domestic market has led construction companies to seek growth elsewhere, with overseas construction orders increasing over the last several years. The total value of overseas orders stood at over 37 billion U.S. dollars in 2024, with most of these orders coming from Middle Eastern countries. Apart from residential structures, these companies have started working on other development projects overseas, such as the building of roads and power plants, in collaboration with local governments. Indeed, a significant portion of overseas construction orders were for industrial facilities, such as plants.Workers and working conditions
Currently, there is an imbalance of supply and demand of workers in the South Korean construction industry. Attracting new workers to satisfy demand hinges on improving worker satisfaction levels and general working conditions. However, over half of all employees working in construction are over the age of 50, raising concerns about not just productivity levels but also the risk of casualties. The rates of accidents and deaths from heavy industries, such as construction, remain high, although greater investment into research and more frequent implementation of information and communication technologies are expected to improve this.Outlook for the construction industry
In the next year, demand is expected to see slight gains, with inflation and interest rates having shown some improvement. Greater investments into the construction of large-scale social overhead capital projects will likely help support the recovery of the market in the long-term. However, working toward a complete recovery remains challenging as political uncertainties, both at home and abroad, are likely to hinder the flow of investments. Depending on changes in regulations, favorable adjustments could help relieve some financial burden on this sector going forward.H. Yoo
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Jan 24, 2025
H. Yoo
Research expert covering South Korea
