Recent Study: South Korea Infrastructure Report Q1 2015

From: Fast Market Research, Inc.
Published: Fri Nov 21 2014

We see no reason to deviate from our expectations of a continuing slowdown in South Korea's construction sector. This is primarily because of our downbeat outlook towards all of the country's construction sector drivers - namely, weak macro fundamentals for residential buildings, a poor export outlook for non-residential buildings and declining government spending on infrastructure.

Some notable factors that affected infrastructure development in recent quarters were:

* The slowdown in South Korea's construction industry that we have been calling for appears to be under way. According to latest data from the Bank of Korea (BoK), the South Korean construction industry expanded a seasonally-adjusted 2.4% year-on-year (y-o-y) in Q114, slowing from 3.9% in Q413. Overall building construction saw growth decelerate from 8.9% in Q413 to 6.2% in Q114 as the acceleration in residential building from 10.6% to 16.0% was insufficient to negate a 0.3% contraction in non-residential building construction. Civil engineering, meanwhile, maintained its contraction as the government continued to tighten public spending.
* Despite the muted outlook, we note that our construction growth forecast for 2014 is still significantly higher than the historical ten-year average (the sector contracted by an average of 0.26% per annum between 2004 and 2013 [based on 2010 prices]). This is because monetary conditions in South Korea remain relatively conducive for construction activity. To be sure, the BoK cut the benchmark base rate by 25 basis points to 2.25% in August 2014 and with economic momentum unlikely to pick up pace quickly, we expect monetary conditions to remain fairly accommodative going forward.

Full Report Details at

The South Korea Infrastructure Report features Business Monitor International (BMI)'s market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.

BMI's South Korea Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Korean infrastructure and construction industry.

Key Benefits

* Benchmark BMI's independent infrastructure industry forecasts for South Korea to test other views - a key input for successful budgetary and planning in the Korean infrastructure market.
* Target business opportunities and risks in the Korean infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Korea.

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