Despite a 49% increase in construction orders in September, the perceived economic downturn… Construction employment declines for 29th straight month

Last September, domestic construction orders increased by 49% compared to the same month last year, thanks to large-scale private projects such as semiconductor production facilities.

However, residential construction performance and employment in the construction industry continued to be sluggish, and the perceived economic performance of construction companies worsened.

According to the 'Monthly Construction Market Trends' announced by the Korea Construction Industry Research Institute on the 10th, construction orders in September amounted to 24.6 trillion won, an increase of 49.3% from the same month last year and 45.4% from the previous month.

Public orders increased by 4.2% to KRW 5 trillion due to the expansion of civil engineering projects such as the Hadong Combined Cycle Power Plant and Yongin Advanced System Semiconductor Cluster National Industrial Complex construction.

Private orders increased by 67.6% to KRW 19.6 trillion, with new orders such as semiconductor production and support facilities and Wirye New Town Bokjeong Station area complex development project, as well as increased contract amounts for existing construction and maintenance projects.

In particular, private non-housing orders increased by 139.7%, leading to an increase in overall orders.

Construction capacity, which represents actual construction performance, was KRW 13.1 trillion, an increase of 4.4% from the same month last year, with improvement concentrated in the public and civil engineering sectors.

Public establishment increased by 28.7%, while private establishment decreased by 1.1%. By construction type, civil engineering workability increased by 25.0%, but building workability decreased by 2.8%. Within construction, non-residential use increased by 6.1%, but residential construction construction decreased by 8.8%.

Employment slump in the construction industry also continued.

The number of employed people in the construction industry in September was 1,926,000, a 2.4% decrease compared to the same month last year, marking a 29th consecutive month of decline. The decline also expanded compared to August (-1.7%).

The cost burden continued as construction costs rose.

The construction cost index rose 5.9% from last year to 139.48, approximately twice the consumer price increase rate (2.9%) over the same period.

The October Construction Business Survey Index (CBSI), which indicates the perceived economic performance of construction companies, was 70.6, down 2.6 points from the previous month.

This is due to the deterioration of conditions for collecting payments and securing work, with the construction payment index and order backlog index falling by 13.3 points and 8.6 points, respectively.

The small and medium-sized business index by company size was relatively poor at 55.3, and the local index by region was only 66.9.

Researcher Lee Ji-hye evaluated, "Given that large semiconductor facilities, complex development projects, and increases in existing contracts affected performance, it is necessary to be cautious in interpreting this as a recovery in the overall construction market."

He then emphasized, “We must improve the conditions for project promotion so that increased orders lead to actual construction starts and job recovery, and alleviate difficulties in recovering construction costs and financing for small and medium-sized and local construction companies.”