Last year's construction industry sales fell by nearly 20 trillion won from a year earlier. It was the biggest drop since 1999. The industry says construction companies cut projects as profitability from building declined amid high interest rates and high inflation.
According to the "2024 construction industry survey results (provisional)" released by the Data Office on the 16th, last year's construction industry sales were 487.7 trillion won. That was down 3.8% (18.4 trillion won) from the previous year (506.7 trillion won), marking the largest decline in both amount and percentage in 25 years since 1999.
Overseas construction sales (41.3 trillion won → 48.4 trillion won) increased by 7.1 trillion won in a year, but domestic construction sales (465.4 trillion won → 439.3 trillion won) fell by 26.1 trillion won.
A Data Office official said, "As private building contract performance decreased in 2023, domestic construction sales also declined in 2024," adding, "With high interest rates and high inflation, the company's profitability from construction worsened, so contracts decreased." The Construction & Economy Research Institute of Korea pointed to high interest rates and high project costs as factors worsening construction industry profitability in "2024 management performance of construction firms subject to external audit and analysis of marginal firms." The peak benchmark interest rate in 2023 was 3.5% per year, 1 percentage point higher than now.
The number of construction industry companies was 89,101, up 1,210 from the previous year (87,891). Specifically, the number of companies increased mainly in civil engineering construction (127), interior construction and building finishing (646), and electricity and communications (304).
In contrast, the number of people employed in the construction industry was 1,759,000, down 52,000 from the previous year (1,811,000). Employment decreased mainly in site preparation and structure construction (-56,000), building construction (-12,000), and building equipment installation (-3,000).