Last year, domestic and international construction spending in South Korea fell by nearly 29 trillion won, totaling 335 trillion won. The decline rate of 7.9% marks the largest drop since the 1998 financial crisis, which saw a decrease of 12.9%. This downturn is attributed to a slump in the private construction market and poor performance in overseas projects.
According to the "2025 Construction Industry Survey Results" released by the National Data Agency on August 28, the construction spending last year was 335 trillion won, a decrease of 28.8 trillion won from the previous year. Construction spending refers to the actual value of projects completed in the survey year.
While construction spending increased by 1.3% in 2024 compared to the previous year, it reversed sharply last year. Domestic construction spending was 297 trillion won, down 18.8 trillion won (6.0%) from the previous year. Spending in the metropolitan area was 138.7 trillion won, a decrease of 12.1 trillion won (8.0%), while non-metropolitan areas saw a drop to 158.3 trillion won, down 6.7 trillion won (4.1%).
Regionally, construction spending in Gyeonggi Province fell by 11.8% to 79.3 trillion won. Incheon experienced a 10.0% decline, while Seoul saw a slight increase of 1.3%, totaling 41.3 trillion won. In non-metropolitan areas, Sejong reported a 22.4% decrease, Daegu 19.9%, and Gyeongnam 12.5%.
By type of work, construction spending on buildings, including apartments and offices, totaled 212.2 trillion won, down 18.4 trillion won (8.0%), accounting for most of the decline in domestic construction spending. Civil engineering projects, including highways and railways, decreased by 2.0% to 47.2 trillion won. However, industrial facilities increased by 2.3% to 30.1 trillion won.
The downturn in the private sector was particularly pronounced. Private construction spending was 204.2 trillion won, down 21.5 trillion won (9.5%) from the previous year. In contrast, public sector spending rose by 2.7 trillion won (3.0%) to 92.5 trillion won, partially offsetting the decline in the private sector.
Within the public sector, construction spending by central government agencies increased by 10.3%, local governments by 4.0%, and public organizations by 7.5%. However, spending on projects initiated by public enterprises decreased by 1.5%.
By industry, specialized construction sectors saw a spending drop of 8.6% to 181.5 trillion won, which was greater than the 1.5% decline in general construction. Spending on fire protection systems fell by 12.2%, mechanical installations by 10.9%, and specialized construction by 10.3%.
Overseas construction spending was 38.1 trillion won, down 10 trillion won (20.8%) from the previous year. Spending in the Americas decreased by 45.2%, Europe by 39.4%, and Asia by 23.5%. In contrast, spending in the Middle East increased by 5.8% to 16.7 trillion won.
The total construction spending of the top 100 construction firms was 106.1 trillion won, an 8.2% decrease. Domestic spending saw a slight decline of 1.0%, while overseas spending plummeted by 20.1%. The top 100 firms accounted for 92.1% of total overseas construction spending.
The number of construction companies with project records increased by 489 (0.5%) to 89,590, despite the significant drop in project volume.
Last year, the total value of construction contracts was 307.1 trillion won, a decrease of 1.2 trillion won (0.4%) from the previous year. Domestic contracts increased by 4.0% to 277 trillion won, driven by a rise in building contracts, while overseas contracts fell sharply by 28.1% to 30.2 trillion won. Regionally, contracts in the Middle East dropped by 52.0%.
* This article has been translated by AI.
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