Construction Industry in Korea sees decline in May due to sluggish apartment sales

It was investigated that the construction industry worsened in May due to the sluggish apartment sales. It is analyzed that the large-scale supply originally planned was carried over due to the housing market downturn, which affected the overall index.

According to the Korea Institute of Construction Industry on the 4th, the Construction Business Survey Index (CBSI) for May was 66.4, down 13.8 points from the previous month. This is the lowest figure since 63.7 in January. The CBSI showed signs of recovery to 80.2, up 8.0 points in April, but was sluggish in May.

If the CBSI is below the baseline of 100, it means that more companies are pessimistic about the current construction market situation, and if it exceeds 100, the opposite is true.

Park Cheol-han, a researcher at the Korea Institute of Industrial Science and Technology, explained, “Although some improvements have been made in the construction volume, such as completion and orders, it is analyzed that the index declined due to the sluggish sales compared to the plan in May.”

In April, the index recovered due to the partial alleviation of the sluggish situation in terms of orders and completions, and this trend is expected to continue in May. However, the CBSI index fell by more than 10 points in May regardless of order receipts and existing conditions, as the market was worse than expected.

Construction companies usually focus on pre-sale in May, before the June-July monsoon season. However, in May of this year, only 14,000 households were sold. Initially, real estate R114 identified 30,000 households as planned for sale by major construction companies. However, due to the sluggish real estate market and unsold sales, not even half of the supply could be achieved. It is the lowest level ever since 2000, when statistics were confirmed.

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As a result, it is analyzed that the BSI index of large (27.3 points compared to the previous month) and mid-sized companies (16.3 points compared to the previous month) fell compared to the previous month.

Performance indices by sector improved for the most part. New orders were 80.4, up 5.9 points from the previous month, and construction completion was 94.3, up 6.3 points from the previous month.

The order backlog (78.5) increased by 5.2 points from the previous month, and the construction payment (87.5) and financing (78.9) increased by 2.9 points and 1.5 points from the previous month, respectively.

The outlook index for June was expected to record 76.6, up 10.2 points from May.
Reporter Park Byeong-joo can7909@

Joongdo Ilbo (, unauthorized reproduction, collection, and redistribution prohibited

2023-06-04 10:37:19
#Construction #sentiment #lowest #months.. #Effects #Housing #Economic #Downturn

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