Due to the downturn in the construction market, the number of construction sites has decreased, resulting in domestic construction performance in the first quarter of this year being over 20% lower than the same period last year.
According to the Korea Research Institute for Construction Policy (KRIC) on the 19th, construction output in the first quarter of this year was 26.8659 trillion won, down 7.2172 trillion won (21.2%) from the same period last year. Construction output refers to the performance of construction work up to a specific point in time. It is a representative current indicator that shows how much construction is taking place.
The rate of decline in construction output compared to the same period last year has exceeded 20% for the first time since the third quarter of 1998 during the foreign exchange crisis (7.3211 trillion won, 24.2%). Construction output decreased by 3.1% in the second quarter of last year, and the decline grew to 9.1% in the third quarter. Following a 9.7% drop in the fourth quarter, this year recorded a decline of over 20%.
The decline in construction output indicates that idle labor and equipment are increasing, which is also linked to the ongoing sluggishness in construction jobs.
In addition to the poor current indicators, leading indicators directly related to work, such as building permits and construction starts, have also fallen sharply. From January to April, building permits (total floor area) decreased by 21.4% compared to the same period last year. Construction starts (total floor area) also fell by 22.5%.
Park Seon-gu, head of the Economic and Financial Research Office at KRIC, noted, "It is urgent to revitalize the construction market through the formation of a supplementary budget by the government," adding, "As polarization within the construction market is intensifying, execution should be directed in a way that smaller construction companies, rather than large enterprises, and local areas, rather than the metropolitan area, can receive tangible benefits."