In the third quarter of this year (July–September), the number of construction companies that reported registration cancellation or closure decreased from the previous quarter. Cancellations and closures surged from 2023 due to soaring construction costs and a downturn in the construction market. Although cancellations and closures fell in the third quarter, many say it remains to be seen whether the construction slump has hit bottom.
According to the Ministry of Land, Infrastructure and Transport and the Construction Industry Information Service on the 28th, 767 construction companies had their registrations canceled or closed in the third quarter of this year. Of these, 223 were general contractors handling all types of work such as building and civil engineering, and 544 were specialty contractors handling specific trades only.
This was a 2.5% (20 companies) decrease from the previous quarter, the second quarter of 2025 (787 companies). Cancellations and closures among general contractors fell by 22 from the previous quarter, while those among specialty contractors increased by 2.
Voluntary closure was the most common reason for cancellation or closure, accounting for 510 companies, or 66.5% of the total. Six out of 10 shut their doors on their own. A total of 210 companies (27.4%) had their registrations canceled for reasons such as failing to meet registration standards or violating business suspension orders. Another 47 companies (6.1%) disappeared through comprehensive transfer or mergers.
Cancellations and closures among construction companies increased sharply as global inflation spread following the outbreak of the war in Ukraine. That is because the construction market deteriorated amid soaring construction costs and the deterioration of project financing (PF) loans. In 2023, a total of 2,771 companies were canceled or closed, up 600 from the year before. In 2024, 3,072 companies disappeared, an increase of 301 companies (10.9%) from the previous year.
So far this year, 747 companies were canceled or closed in the first quarter (January–March), and more than 700 corporations also shut down in both the second quarter (787 companies) and the third quarter (767 companies). Through the third quarter, 2,301 companies have been canceled or closed. On an annual basis through the fourth quarter, more than 3,000 are expected to close or have their registrations canceled.
Experts say the construction market is improving little by little, but a full-fledged recovery in conditions has yet to begin. Lee Eun-hyung, a research fellow at the Construction & Economy Research Institute of Korea, said, "While performance is recovering for large, high-quality construction companies, small and micro corporations are still in a difficult situation," adding, "As the construction slump continues, the market is being reorganized around large corporations."
Kim Young-deok, a senior researcher at the Korea Research Institute for Construction Policy, said, "Looking at construction companies' management performance, not only profitability but also growth and stability have all worsened," and added, "It is difficult to expect a full-fledged rebound in conditions this year."