Recently published research from Timetric, "Construction in South Korea - Key Trends and Opportunities to 2017", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 08/22/2013 -- The South Korean construction industry recorded a review-period (2008-2012) CAGR of 1.58%. The housing market deflated in 2008 as interest rates began to rise and banks tightened their lending conditions. This was a key reason for a decline in domestic demand, and contributed to the country's economic deceleration from an average of 5.2% during 2000-2007 to 2.3% in 2008, and just 0.3% in 2009. Infrastructure investments will support the construction industry, which is struggling due to poor property sales and tightening credit conditions. Investments related to the 2018 Winter Olympic Games are also expected to drive industry growth. Timetric expects the South Korean construction industry to record a forecast-period (2012-2017) CAGR of 3.07%.
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- South Korea's real GDP growth moderated from 3.7% in 2011 to 2.0% in 2012 owing to subdued domestic and external demand. Exports, which account for over half of the economy's GDP, moderated from 9.1% in 2011 to 4.2% in 2012 due to weakening demand from key trading partners. Investments contracted by 1.7% in 2012 - worse than the 1.0% decline reported in 2011 - led by poor performance in both facilities and construction investment.
- South Korea's real GDP is expected to grow by 2.5% in 2013 and 3.6% in 2014, led by gradual improvement in global economic output. The South Korean economy is expected to recover and grow by an average of 4.0% over the forecast period.
- South Korea's construction industry underwent a period of weak performance due to the financial crisis. Output declined by 1.6% in 2009 and recorded only a marginal growth of 0.9% in 2010. Korean construction companies are struggling due to weak property sales on account of tightening credit conditions.
- Office building construction projects that were delayed following the financial crisis resumed development in 2011. A number of these projects have been completed or are nearing completion, and the market is therefore oversupplied. In the fourth quarter of 2012, leasing demand for Grade A office buildings in Seoul recorded a noticeable decline. Considering the oversupply and the moderate growth forecast, the market will continue to be tenant-driven with developers competing on price to have their properties leased.
- Retail building development is focused on the construction of outlets, as the format is considered better value in the current economic conditions. Fashion stores continue to be primary occupiers of retail leasing space in Korea and much of the nation's shopping mall and outlet construction is taking place in satellite towns.
Companies Mentioned in this Report: Hyundai Engineering & Construction Co. Ltd, Samsung Engineering Co. Ltd, GS Engineering & Construction Corporation, Daelim Industrial Co. Ltd, Kumho Industrial Co. Ltd
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