 |
Photo = Yonhap news |
[Alpha Biz= Paul Lee] The construction and real estate sectors continue to face a challenging downturn, with the number of registered general construction companies in the first quarter of this year falling to its lowest level on record.
According to the construction industry knowledge information system (KISCON) on May 6, the number of companies registering for general construction in the first quarter (January to March) was 131. This is the lowest figure since KISCON started disclosing data in 2004. Compared to the same period last year, the number decreased by 6.3%, and from the previous quarter, it dropped by 2.3%.
In addition, the number of construction company closures (including some businesses shifting industries) in the first quarter reached 160, the highest since 2011 (164 closures), marking a 14-year peak. This represents a 19.4% increase compared to the same period last year.
Key construction indicators have also been on a downward trend this year.
According to the Korea Construction Industry Research Institute, construction orders totaled 21.7 trillion won in January and February, a 14.9% decrease from the previous year. Notably, public sector orders saw a dramatic drop of 26.9%, significantly outpacing the 9.0% decline in private sector orders.
In February, public sector orders plummeted by 28.3% year-on-year to 2.9 trillion won, marking the lowest level since 2019 (2.8 trillion won). The sharp decline in orders is attributed to a nearly 1 trillion won reduction in the social overhead capital (SOC) budget, leading to a sharp decrease in public sector bids. On the other hand, private sector orders showed a slight increase of 0.6%, totaling 8.4 trillion won.
This year, a number of mid-sized and regional construction companies ranked around the top 100 in construction capability have been filing for court rehabilitation. In January, Shindong-A Construction filed for rehabilitation, and on March 18, Daehung Construction, the largest firm in the Chungcheongbuk-do region, also filed. In total, 10 construction companies have applied for rehabilitation this year.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
