South Korean construction industry trends

Recent data and reports highlight diverse challenges and performance metrics within the South Korean construction sector. Ministry of Land, Infrastructure and Transport data indicates that falls were responsible for 52.6% of all construction site fatalities between 2021 and June 2025, totaling 642 deaths. Major firms, including Hyundai E&C and Lotte Engineering & Construction, reported high numbers of fall-related fatalities, with investigations citing structural deficiencies such as a lack of proper walkways.

Financially, the industry shows divergent trends. POSCO E&C has seen success in urban redevelopment, securing significant contracts to reach approximately 80% of its annual target. Conversely, GS Engineering & Construction reported a 97.4% drop in operating profit for the first half of the year, driven by capital impairment in Vietnamese subsidiaries, investment losses in battery recycling, and liquidation proceedings for its UK-based modular construction subsidiary.

Newer developments indicate the sector is facing escalating costs and declining orders. In urban redevelopment and reconstruction projects, rising raw material and labor costs have triggered frequent disputes. In Seoul, 75 disputes were recorded between 2022 and September 2024, with settled agreements showing an average cost increase of 38.2%.

Regional economies are also experiencing downturns. In Daegu, 71.6% of local construction firms reported deteriorating business conditions, and 75% noted a decrease in orders. In September, Daegu’s construction orders fell 79.6% compared to the previous year. This contraction has reduced the number of local hardware stores and real estate agencies, leading to warnings that prolonged stagnation could impact the broader financial sector.