Attention is focused on whether a more severe cold wave will hit the construction industry. This is because 11 construction companies have collapsed in 9 months due to the worsening domestic housing market, and the war between the Palestinian armed political faction Hamas and Israel may also have an impact on overseas construction orders. In particular, some were concerned about delays in project orders along with an increase in atomic ash prices due to rising oil prices.
According to the Construction Industry Knowledge Information System on the 11th, as of this day, the number of construction companies that went bankrupt from January to September of this year (excluding construction companies with current account transaction suspension announced by the Korea Financial Telecommunications and Clearings & Clearings Institute and those that were closed or registered at the time of current account transaction suspension) totaled 11. were counted by location.
By license, there are 6 general construction companies and 5 specialized construction companies. The locations of floating construction companies were as follows: 1 in Seoul, 1 in Incheon, 3 in Gyeonggi, 2 in Busan, 1 in Chungnam, 2 in Jeonnam, and 1 in Gyeongbuk.
While construction company registrations have decreased, business closures have increased. The cumulative number of general construction company closure reports from January to September this year was 294, an increase of 94.70% compared to the same period last year (151 cases). During the same period, the number of reports of closure of specialized construction companies increased by 21.03% to 1,427 cases compared to the same period last year (1,179 cases).
However, new registrations for general construction companies decreased from 4,730 in January to September of last year to 803 in January to September this year, and new registrations for specialized construction companies decreased from 3,768 in January to September of last year to 3,565 in January to September of this year.
An official in the construction industry said, “As problems such as polarization of the real estate market and difficulties in raising funds still remain, we need to wait a little longer for the recovery of the construction industry,” but also pointed out that “the number of bankrupt companies is not expected to increase as sharply as in the first half of the year.”
◇Concerns such as delays in overseas orders due to the war between Hamas and Israel… Construction industry ‘close attention’
The industry is closely watching to see how far the impact of the war triggered by Hamas’ attack on Israel will extend. This is because countries around the world, including countries surrounding Israel, are complexly intertwined with politics, economy, and religion, so a global economic downturn is possible.
In particular, some voices are expressing concerns about a decline in orders from the Middle East. According to the Overseas Construction Association, the cumulative amount of orders received by Korean companies from the Middle East from January to September this year was $7,985,106,000, a slight increase from the same period last year ($6,633,625,000).
Currently, major domestic construction companies such as Samsung C&T (028260) and Hyundai Engineering & Construction (000720) are carrying out projects in the Middle East, including Saudi Arabia. In particular, it has been reported that one Korean company in Israel has completed construction of power generation facilities and is about to begin test operations.
Another construction industry official said, “Expectations for a recovery in the housing business are spreading in the market, but the number of bankrupt companies may not increase significantly in the second half of the year,” but added, “Problems such as polarization in the real estate market and difficulty in raising funds still need to be watched.” did.
He continued, “Right now, it is a war between Israel and Hamas, but the interests of each country are intertwined, so it is expected that the relationship with third countries representing their interests will also be affected. If this atmosphere continues, problems may arise in project orders, oil prices, etc. “He added.
The government is also paying close attention to the current situation. An official from the Ministry of Land, Infrastructure and Transport said, “I think we will have to watch (the current situation) for now, and if necessary, we are preparing to hold an emergency meeting with the construction industry,” adding, “Looking back on past cases, we cannot conclude that the problem will spread beyond the border.” “There is no such thing, so we should avoid making hasty predictions (such as a decline in orders from the Middle East),” he explained.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.