Why Did Sales for S. Korean Construction Companies Decline for the First Time in Four Years in 2024?
Synopsis
In a surprising turn of events, South Korean construction companies reported their first sales decline in four years for 2024, highlighting the impact of a prolonged industry slump. This article delves into the details of the downturn, exploring the statistics and economic factors at play.
Key Takeaways
Sales of South Korean construction companies fell for the first time in four years.
Combined sales totaled 487.7 trillion won in 2024.
Domestic sales decreased by 5.6% year-on-year.
Overseas sales increased by 17.1%.
The construction industry's workforce decreased by 2.8%.
Seoul, Dec 16 (NationPress) The sales figures for South Korean construction firms have plummeted for the first time in four years in 2024, as revealed by government statistics on Tuesday. The total sales for local construction companies reached 487.7 trillion won ($331.67 billion) last year, reflecting a 3.8% decrease from the previous year, according to the Ministry of Data and Statistics, as reported by Yonhap news agency.
This downturn marks the first decline since 2020, when the nation was impacted by the COVID-19 pandemic.
The latest figures stand in stark contrast to a 12.3% growth in 2022 and a 9.9% increase in 2023.
Sales within the domestic market fell by 5.6% year-on-year to 439.3 trillion won, while international sales surged by 17.1% to 48.4 trillion won.
The total number of construction companies in South Korea was recorded at 89,101 last year, an increase of 1.4% from the previous year.
However, the number of general construction firms dropped slightly by 0.3% to 15,861, while specialized builders saw a 1.7% increase to 73,240.
Despite this, the overall workforce in the construction sector decreased by 2.8% to 1.76 million in 2024.
The construction industry's added value was 143.2 trillion won last year, down 5.2% compared to the previous year.
Additionally, local builders' construction costs decreased by 2.6% to 477.7 trillion won last year.
This decline in the sector arises due to rising financing and construction costs amidst inflation, coupled with increased risks related to project financing and unsold homes, particularly in struggling non-metropolitan property markets.
On a brighter note, the South Korean economy is gradually recovering in terms of industrial production, buoyed by the growth in domestic consumption, despite the ongoing challenges facing the construction sector, according to a state-run think tank.
"While the construction industry has faced prolonged weakness, consumption has shown signs of improvement due to the gradual impact of interest rate cuts, bolstered by government initiatives," the Korea Development Institute (KDI) noted in its monthly economic assessment report.
Point of View
The construction sector's challenges, including rising costs and unsold properties, cannot be overlooked. It is crucial to monitor these developments closely as they may have wider implications for the national economy.
NationPress
8 May 2026
Frequently Asked Questions
What caused the decline in sales for South Korean construction companies?
The decline is attributed to rising financing and construction costs, increased risks related to project financing, and a sluggish market for unsold homes.
How much did the sales drop in 2024?
Sales fell by 3.8% in 2024, totaling 487.7 trillion won ($331.67 billion).
What are the trends in domestic and international sales?
Domestic sales decreased by 5.6% while international sales increased by 17.1%.
What is the current workforce in the South Korean construction industry?
The workforce decreased by 2.8% to 1.76 million in 2024.
What does the Korea Development Institute say about the economy?
Despite the construction sector's weakness, the KDI indicates that the overall economy is gradually recovering, driven by growth in domestic consumption.
