A survey found that 44% of construction companies that carried out completion-stage projects over the past three years posted losses.
On Jan. 14, according to the Construction Association of Korea and the Korea Research Institute for Construction Policy, a survey of 150 companies conducted from Sept. 11 to Nov. 6 found that the share of loss-making projects among completion-stage projects over the past three years (2023–2025) reached 43.7%.
The main reasons for loss-making construction were cited as underestimation of project costs at the bidding stage and failure to adjust the contract amount at the construction stage. In particular, it was found that ordering agencies frequently cut project costs citing lack of budget or unjustly reduced the estimated price by applying outdated unit prices.
In a separate survey of 123 companies over the same period, 64.1% responded that construction periods were not being assessed appropriately. Projects that incurred a penalty for delay (liquidated damages for delay) due to insufficient construction time or that were carried out as crash projects (projects that deploy additional personnel and equipment) accounted for 22% of the total.
In response, the association plans to push for swift passage of an amendment to the National Contract Act currently introduced, centered on paying additional expense for extensions of the duration of long-term continuing projects.
It also decided to pursue measures to expand the scope of the system that excludes bids submitted at less than 98% of the net construction cost from the current less than 10 billion won to less than 30 billion won, and to allow objections to unfair estimated price calculations.
In addition, confusion continues as private-sector projects are being halted due to insufficient legal provisions related to adjusting contract amounts for price fluctuations. The association plans to actively consult with the government and the National Assembly to ensure that an amendment to the Framework Act on the Construction Industry related to this can pass the National Assembly swiftly.
The association also emphasized that it will work to improve reasonable systems to eradicate serious industrial accidents, strengthen member companies' capacity to respond to labor unions, revitalize the construction economy by generating construction volume, and improve the image of the construction industry.