Last year, construction industry sales exceeded 506 trillion won. Although the number of workers also increased, surpassing 1.8 million, concerns are growing about a future downturn in the business as the contract amount, a leading indicator of construction activity, reverted to a downward trend for the first time in five years.
According to the "2023 Construction Industry Survey (corporations performance institutional sector)" released by Statistics Korea on the 17th, last year's construction sales amounted to 506.7 trillion won, an increase of 9.9% (45.7 trillion won) compared to the previous year. This marks the third consecutive year of growth following COVID-19. However, the growth rate slowed compared to 2022 (12.4%).
By industry, general construction sales increased by 12.4% (36.3 trillion won) to 328.8 trillion won, while specialized construction work sales increased by 5.6% (9.5 trillion won) to 177.9 trillion won.
However, construction contract amounts decreased by 12.1% (41 trillion won) to 298 trillion won, marking a decline for the first time in five years since 2018. The rise in interest rates, coupled with increases in raw material costs and wages, seems to have led to a reduction in orders due to increased construction costs.
The number of construction corporations stood at 87,891, an increase of 0.7% (652) from the previous year. The number of workers also rose by 4.0% (70,000) to 1.81 million. Among them, technical and skilled positions increased by 2.6% (12,000), and temporary and daily positions grew by 5.2% (47,000), indicating that demand for on-site personnel remains high.
The growth of the top 100 corporations by construction capacity rating was also notable. These corporations achieved sales of 203.4 trillion won, up 23.7% from the previous year, accounting for 40.1% of the total sales.
However, construction costs increased by 11.5% (50.6 trillion won) to 490.5 trillion won, heightening the pressure on profitability. The rise in raw material prices and labor costs were cited as the direct causes.
The added value of the construction industry was only 151.1 trillion won, recording an increase of 3.4% (5 trillion won). Added value is the comprehensive value of aggregates including total wages, welfare benefits, rent, depreciation expenses, and operating profit.