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The construction market in South Korea is estimated to grow at a CAGR of 4.79% between 2022 and 2027, and the size of the market is forecasted to increase by USD 50.9 billion. The growth of the market depends on several factors, such as the growing demand for modular houses, the adoption of dry construction techniques, and the increase in the number of smart cities.
This report extensively covers market segmentation by type (private and public) and end-user (residential, non-residential, and civil works). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The report includes the adoption lifecycle of the market, from the innovator’s stage to the laggard’s stage. It also includes key purchase criteria and the drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Driver
The growing demand for modular houses is a key driver impacting the growth of the construction market in South Korea. Modular houses are also known as prefabricated homes. Unlike a regular house, a modular house is manufactured at an offsite location and then shipped to the required location, where it is assembled and erected. Buyers have the flexibility to incorporate their own designs and specifications of the house. The demand for modular houses has been increasing steadily over the last few years in South Korea due to the increasing housing rents and the high cost of building new houses.
With the help of automation, manufacturers can achieve quicker delivery times and higher accuracy. The demand for modular houses in South Korea is expected to increase significantly, especially among single-parent families. The low cost of these houses, when compared with that of traditional houses, has increased their demand among students in large cities, where renting or buying a house is expensive. These factors will fuel the growth prospects of the South Korea construction market.
Significant Trend
The increase in public infrastructure spending is a significant trend influencing the growth of the construction market in South Korea. The South Korean government plans to invest billions of dollars in upgrading the country's public infrastructure to drive economic growth.
Engineering, procurement, and construction firms in South Korea are also involved in large housing, transportation, plant, and commercial projects. While large firms only focus on multibillion-dollar projects, SMEs play a significant role in smaller projects. Thus, the increasing investments by the government in public infrastructure will lead to market growth during the forecast period.
Major Challenge
Uncertain macroeconomic conditions are a major challenge impacting the growth of the South Korea construction market. National and regional macroeconomic conditions have a significant impact on the construction industry. South Korea is recovering from the negative effects of the COVID-19 pandemic. However, uncertainty about the prevailing economic conditions will also have a negative impact on the construction industry, as customers may postpone spending in response to tighter credits, a decline in income or asset values, and negative financial news.
Conditions of the non-residential real estate markets, costs of labor and construction materials, access to credit, and other macroeconomic factors can also affect the demand for construction. In addition, uncertainty regarding economic growth has delayed government subsidies, which has led to delayed or canceled construction projects. Such factors will negatively impact the growth of the market during the forecast period.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
DPR Construction - The company offers construction services such as model-based coordination, digital fabrication, and production tracking and planning. It also offers solutions such as sustainable construction, preconstruction, special services group, self-perform workers, and others.
Hanwha Corp. - The company offers construction services such as urban development, apartments, and mixed-use building. The company also undertakes construction activities of building and housing, plants, and other civil works.
We also have detailed analyses of the market’s competitive landscape and offer information on 15 market vendors, including:
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis. Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies vendors into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Vendors are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
Type Segment Analysis:
The private segment will account for a major share of the market's growth during the forecast period. The need for renovation and modernization of building structures in the private sector has increased in recent years due to the aging of existing buildings and the growing resale of properties in South Korea.
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The private segment was valued at USD 116.28 billion in 2017 and continued to grow until 2021. New housing projects reached a peak in South Korea in the last several years. Hence, public construction activities were limited in the country. This, in turn, will increase the number of private construction activities during the forecast period.
End-user Analysis:
Based on end-user, the construction market in South America has been segmented into residential, non-residential, and civil works. The residential segment was the largest revenue-contributing segment in 2022, and it is expected to retain its position during the forecast period. The growth of the segment is mainly attributed to the growing demand for housing in South Korea. Macroeconomic factors such as population growth, urbanization, and economic development have propelled the demand for residential housing in South Korea. As a result, South Korea is one of the most popular markets for residential properties worldwide.
The outbreak of COVID-19 in 2020 had an adverse impact on the economy of South Korea. The stringent lockdowns imposed by governments led to disruptions in supply chain activities. However, after the initiation of large-scale vaccination drives, the lockdown restrictions were lifted, which led to the resumption of construction projects. Logistics and transportation services also resumed in 2021. Thus, the construction industry in South Korea has entered the recovery phase. Investments in residential and non-residential construction activities are expected to drive the growth of the construction market in South Korea during the forecast period.
The report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Construction Market in South Korea Scope |
|
Report Coverage |
Details |
Page number |
126 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.79% |
Market growth 2023-2027 |
USD 50.9 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
4.42 |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bumwood Co. Ltd., Daewoo E and C, DL Group, DPR Construction, GS E and C Corp., Gyeyang Co. Ltd., Hanwha Corp., HL D and I Halla, Hyundai Development Co., LOTTE Engineering and Construction Co. Ltd., MUNYOUNG Corp., Namkwang Construction Co. Ltd., POSCO, Samsung Electronics Co. Ltd., SGC eTEC E and C, and SK ecoplant CO. LTD. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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