The Korea Construction Industry Institute (KICT) projected that the domestic construction contracts would exceed 300 trillion won by 2040.
On the 18th, KICT analyzed in its report titled "Construction 2040 Forecast: Changes and Outlook for the Future Construction Industry" that domestic construction contracts will expand from 193.3 trillion won this year to 304.7 trillion won by 2040.
KICT noted that it conducted a comprehensive analysis considering economic growth rates, demographic changes, and social variables.
As key factors leading to future growth in the construction industry, KICT highlighted large-scale national projects, the spread of smart and digital construction, and the increasing demand for eco-friendly and carbon-neutral infrastructure.
KICT projected an average annual growth of 2.4% from this year until 2030, stating that due to real estate project financial (PF) risks and soaring construction costs, the growth rate would be lower than in the past. By 2030, the nominal value of contracts is expected to recover to the level of 2022, but in real terms adjusted for inflation, it will recover to about 90% of the level in 2020.
From 2030 to 2035, it predicted an average annual growth of 3.7%, driven by the resolution of real estate PF issues and the full-scale commencement of large projects such as the Gadeokdo New Airport and the Yongsan International Business District. It also anticipated a slowdown in growth from 2035 to 2040 due to a decrease in social overhead capital (SOC) investment.
Looking at the outlook for dwelling contracts, it is projected to grow at an average annual rate of 2.7% from 2025 to 2030, 4% from 2030 to 2035, and 3.6% from 2035 to 2040.
A KICT official said, "The total population in Korea is expected to decline as it has shifted to a decreasing trend since 2020, and the proportion of the working-age population will also decrease," adding, "The number of households is seen to decline after 2042, indicating a significant possibility of a slowdown in demand for new dwellings."
Park Cheol-han, a researcher at KICT, said, "A strategic approach from the government is necessary to respond to future environmental changes in the construction industry," and urged, "The construction industry must improve its industrial structure from a long-term perspective and actively reflect changing demands."