Construction In South Korea – Key Trends And Opportunities To 2023

South Korea’s construction industry suffered a downturn in 2018, contracting by 4.2% in real terms that year, following an average annual growth of 5.9% during the preceding four years. This decline can be attributed to a reduction in the government spending on infrastructure, a fall in the country’s total exports and a decline in the total construction permits issued.

The country’s construction industry is expected to contract further in real terms – by 5% in 2019 and 1.7% in 2020 – before regaining growth momentum. This decline can be attributed to reduced infrastructure spending, an increase in minimum wages, tighter housing regulations and government policies. Over the remaining part of the forecast period (2019–2023), however, the industry is expected to be supported by the government’s efforts to revitalize the economy, as well as subsequent improvements in investor and consumer confidence.

The government’s investments in the Renewable Energy Plan 2030, 5G infrastructures development, affordable housing and research and development (R&D) will support the industry’s growth over the forecast period. In January 2019, the government approved KRW24.1 trillion (US$21.5 billion) to develop 23 projects in the area of road, rail, manufacturing plant and hospitals in the country.

The industry’s output value in real terms is expected to rise at a CAGR of 1.08% over the forecast period.

GlobalData’s Construction in South Korea – Key Trends and Opportunities to 2023 report provides detailed market analysis, information and insights into the South Korean construction industry, including –

– The South Korean construction industry's growth prospects by market, project type and construction activity

– Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the South Korean construction industry

– Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

– GlobalData expects the residential construction market to remain the largest market over the forecast period and account for 41.5% of the industry’s total value in 2023, supported by the government’s plan to stabilize the housing market by building affordable public housing and increase the supply of rental public housing in the country. In September 2018, the government outlined its plan to build 300,000 housing units, which will be delivered to the public from 2021 onwards, with plans to build 35,000 housing units in the first phase.

– Energy and utilities construction market’s forecast-period growth will be driven by the government’s aims to increase the share of renewable energy contribution in the country’s total energy mix under the Renewable Energy Plan 2030; it aims to increase the electricity consumption from renewable sources from 7% in 2018 to 20% by 2030. Accordingly, it plans to add 48.7GW of new renewable capacity with an investment of KRW123.5 trillion (US$110 billion) by 2030.

– GlobalData expects the infrastructure construction market to record a forecast-period CAGR of 4.66% in nominal terms in 2023, driven by public and private sector investments in the development of the country’s road and rail network. In order to develop the Saemangeum region and enhance its connectivity, the government plans to build a new airport in the region which will be able to handle 670,000 passengers per year by 2025.

– The government’s commitment to providing a quality service in healthcare and increased expenditure on the healthcare and education sectors are expected to support the institutional construction market over the forecast period. The government increased its 2019 budget spending towards health, welfare and jobs creation by 12.1%, going from KRW144.7 trillion (US$131.5 billion) in 2018 to KRW162.2 trillion (US$146.2 billion) in 2019.

– The total construction project pipeline in South Korea – as tracked by GlobalData, and including all mega projects with a value above US$25 million – stands at KRW454.2 trillion (US$412.7 billion). The pipeline, which includes all projects from pre-planning to execution, is well balanced, with 50.1% of the pipeline value being in projects in the pre-planning and planning stages as of July 2019.

Scope

This report provides a comprehensive analysis of the construction industry in South Korea. It provides –

– Historical (2014–2018) and forecast (2019–2023) valuations of the construction industry in South Korea, featuring details of key growth drivers.

– Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

– Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.

– Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

– Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.

– Assess market growth potential at a micro-level with over 600 time-series data forecasts.

– Understand the latest industry and market trends.

– Formulate and validate strategy using GlobalData's critical and actionable insight.

– Assess business risks, including cost, regulatory and competitive pressures.

– Evaluate competitive risk and success factors.

Table of Contents

Table of Contents

1 Executive Summary

2 Construction Outlook: At-a-glance

3 Latest News and Indicators

4 Key Drivers and Risks

4.1. Economic Performance

4.2. Political Environment

4.3. Demographics

4.4. Risk Profile

5 Construction Outlook

5.1. All Construction

5.1.1. Outlook

5.1.2. Project analytics

5.2. Commercial Construction

5.2.1. Outlook

5.2.2. Project analytics

5.3. Industrial Construction

5.3.1. Outlook

5.3.2. Project analytics

5.4. Infrastructure Construction

5.4.1. Outlook

5.4.2. Project analytics

5.5. Energy and Utilities Construction

5.5.1. Outlook

5.5.2. Project analytics

5.6. Institutional Construction

5.6.1. Outlook

5.6.2. Project analytics

5.7. Residential Construction

5.7.1. Outlook

5.7.2. Project analytics

6 Key Industry Participants

6.1. Contractors

6.2. Consultants

7 Appendix

7.1. What is this Report About?

7.2. Definitions

8 About GlobalData

8.1. GlobalData at a Glance

8.2. GlobalData Construction

8.3. Disclaimer

8.4. Contact Us

List of Tables

List of Tables

Table 1: Construction Outlook

Table 2: South Korea, Key Economic Indicators

Table 3: South Korea, Construction Output Value (nominal, KRW Billion)

Table 4: South Korea, Construction Output Value (nominal, US$ Million)

Table 5: South Korea, Top Commercial Construction Projects by Value

Table 6: South Korea, Top Industrial Construction Projects by Value

Table 7: South Korea, Top Infrastructure Construction Projects by Value

Table 8: South Korea, Top Energy and Utilities Construction Projects by Value

Table 9: South Korea, Top Institutional Construction Projects by Value

Table 10: South Korea, Top Residential and Mixed-Use Construction Projects by Value

Table 11: South Korea, Key Contractors

Table 12: South Korea, Key Consultants

Table 13: GlobalData Construction Market Definitions

Table 14: Construction Risk Index Ratings and Scores

List of Figures

List of Figures

Figure 1: Key Markets, Construction Output Growth Matrix and Risk Matrix

Figure 2: South Korea, Construction Projects Pipeline by Sector (KRW Trillion)

Figure 3: South Korea, Residential Construction Permits (Total Number)

Figure 4: Seoul, Housing Sales Price Index

Figure 5: South Korea, Risk Profile

Figure 6: South Korea, Risk Comparison

Figure 7: South Korea, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate)

Figure 8: South Korea, Construction Output Value, Growth Matrix

Figure 9: South Korea, Construction Output Value, by Sector (KRW Billion), 2014–2023

Figure 10: South Korea, Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 11: South Korea, Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 12: South Korea, Commercial Construction Output by Project Type (KRW Billion), 2014–2023

Figure 13: South Korea, Commercial Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 14: South Korea, Commercial Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 15: South Korea, Industrial Construction Output by Project Type (KRW Billion), 2014–2023

Figure 16: South Korea, Industrial Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 17: South Korea, Industrial Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 18: South Korea, Infrastructure Construction Output by Project Type (KRW Billion), 2014–2023

Figure 19: South Korea, Infrastructure Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 20: South Korea, Infrastructure Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 21: South Korea, Energy and Utilities Construction Output by Project Type (KRW Billion), 2014–2023

Figure 22: South Korea, Energy and Utilities Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 23: South Korea, Energy and Utilities Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 24: South Korea, Institutional Construction Output by Project Type (KRW Billion), 2014–2023

Figure 25: South Korea, Institutional Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 26: South Korea, Institutional Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 27: South Korea, Residential Construction Output by Project Type (KRW Billion), 2014–2023

Figure 28: South Korea, Residential Construction Projects Pipeline, Value by Stage (KRW Billion)

Figure 29: South Korea, Residential Construction Projects Pipeline, Projected Annual Spending by Stage (KRW Billion), 2018–2023

Figure 30: South Korea, Headquarters of Key Contractors (% of Total Project Pipeline)

Figure 31: South Korea, Headquarters of Foreign Contractors (% of Project Pipeline with Foreign Contractor)

Figure 32: South Korea, Headquarters of Key Consultants (% of Total Project Pipeline)

Figure 33: South Korea, Headquarters of Foreign Consultants (% of Project Pipeline with Foreign Consultants)

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