South Korea’s construction industry will slow as oversupply in the residential market – particularly around the capital, Seoul – starts to drag on growth. According to new analysis by BMI Research, construction growth will fall from 7.2% this year to stabilise at an average of 1.5% per year between 2021 and 2026.
“After years of rampant growth in construction activity and transaction volume, we believe there will be a slowdown in South Korea’s real estate sector as the number of new projects taper off and high demand is challenged by a persistent property glut,” BMI Research said.
The South Korean government implemented a number of cooling measures in the residential property market in 2016, which have seen the number of housing construction permits issued in the first five months of 2017 begin to tall. Despite this, residential construction still recorded 25.5% growth in 1Q17, driving overall construction sector growth of 12.1%.
According to IA Cement, South Korea’s cement manufacturers have been bracing themselves for a downturn in demand. The cement industry has seen a number of acquisitions this year as leading players have sought to consolidate their positions.
Industry leader, Ssangyong Cement Industrial Co., bought blastfurnace slag cement producer, Daehan Cement Co. in June, reestablishing its position as the largest South Korean cement maker after a challenge from Hanil Cement Co., which took over Hyundai Cement earlier in the year.
Read the article online at: https://www.worldcement.com/asia-pacific-rim/17082017/south-koreas-construction-industry-faces-slowdown/