Albany, NY -- (SBWIRE) -- 11/09/2018 -- South Korea is considered a key developed economy in Asia Pacific. And its construction industry is the topic of study of a recent report by ResearchMoz.us, titled, "Construction in South Korea-Key Trends and Opportunities to 2022." The report factors in various parameters to understand the trajectory of the market. It presents information on the opportunities it presents, the players operating in it, and the government's role.
At the outset, the report states that the South Korean construction industry recorded a rise of 10.1% in 2016. It also notes that the rise was 7.1% in 2017. The average annual growth over the period starting in 2013 and ending in 2015 was a tepid 3.1%. This growth is mainly a result of consumer demand generating business confidence. As a result there has been both private and public sector investments in commercial, infrastructure, and residential projects. The South Korean construction industry has grown because of it.
Another factor that is lending support to the South Korea construction industry is the 2018 Winter Olympic Games. It has already completed the building of a US$109 mn pentagonal stadium to that end. The stadium which can be dismantled once the event gets over has helped to contain costs to a degree. However, many now question the rationale behind building such as expensive structure.
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Over the course of the next few years, the South Korean construction industry is predicted to rise, however at a much reduced pace. The growth is expected to be brought about by efforts of governments to improve energy, commercial, and utilities infrastructure. Thrust on bettering the existing traffic network is also predicted to support growth too in the near term.
The slump in growth pace, on the other hand, is a result of oversupply in the residential sector, especially surrounding its capital Seoul. This, in turn, is mainly a result of the government's efforts to cool property prices.
Our report projects the residential construction segment to contribute almost 43.0% of the volume in the South Korean construction industry in 2022. The main reason for it is the governmental support to build affordable houses for the middle- and low-income groups in the nation. The government envisages to build around 1 million affordable housing units by 2022.
When it comes of infrastructure building, the market output is forecasted to rise at a 2.01% CAGR. This is mainly on account of private and public sector investments in modernizing and developing the nation's transport infrastructure. For example, earlier this year, the Ministry of Land, Infrastructure and Transportation declared its plan to up the share of rail network to the total freight transport to 10.0% by 2021. In 2017, it was around 5%. All these are predicted to have a positive impact on the South Korean construction industry.
The overall construction projects in the pipeline in South Korea, including mega projects above US$25 mn, currently stands at US$268.7 bn.