Construction equipment stands at a construction site in the central city of Sejong, South Korea. Photo by YONHAP \/ EPA<\/p>\n
Aug. 28 (Asia Today) — Construction work completed by South Korean companies fell at the fastest rate since the Asian financial crisis as high interest rates and rising construction costs continued to weigh on projects.<\/p>\n
The value of construction completed in 2025 totaled 335 trillion won (about $248.8 billion), down 29 trillion won (about $21.02 billion), or 7.9%, from the previous year, according to preliminary construction industry survey data released Friday by the National Data Agency.\n<\/p>\n
It was the largest annual decline since the 12.9% drop recorded in 1998 during the Asian financial crisis.<\/p>\n
The downturn largely reflected a 12.1% plunge in construction contracts in 2023 as high borrowing costs and inflation disrupted the industry.<\/p>\n
Construction contracts typically take about 12 to 18 months to translate into actual construction activity, meaning the effects of the 2023 “contract cliff” became fully visible in last year’s figures.<\/p>\n
Domestic construction totaled 297 trillion won, down 19 trillion won (about $13.77 billion), or 6%, marking its largest decline since 1998.<\/p>\n
Building construction fell 8% to 212 trillion won (about $153.66 billion), while civil engineering construction dropped 2% to 47 trillion won (about $34.07 billion).<\/p>\n
Construction commissioned by the public sector rose 3% to 92 trillion won (about $66.68 billion), but private-sector work fell 9.5% to 204 trillion won, dragging down overall performance.\n<\/p>\n
Overseas construction also declined sharply, falling 20.8% to 38 trillion won (about $27.54 billion). It was the largest decrease since a 29% drop in 2017.<\/p>\n
The country’s 100 largest construction companies completed 106 trillion won (about $76.83 billion) of work, down 8.2% from a year earlier. They accounted for 31.7% of total construction output.<\/p>\n
Construction contracts totaled 307 trillion won (about $222.5 billion) in 2025, down 0.4%.<\/p>\n
The decline was driven largely by overseas contracts, which fell 28.1% to 30 trillion won (about $21.74 billion).<\/p>\n
Domestic construction contracts, however, increased 4% to 277 trillion won (about $200.76 billion).<\/p>\n
Because construction activity typically follows contracts with a lag, the recovery in domestic orders could support an improvement in construction output in coming periods.<\/p>\n
— Reported by Asia Today; translated by UPI<\/p>\n
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