Construction

Construction Costs in South Korea Surge by 26% Over Three Years, Doubling Inflation Rate

Over the past three years, construction costs in South Korea have increased, significantly outpacing the country's inflation rate, amid rising prices for key building materials and labor.

Photo by Scott Blake / Unsplash

In South Korea, the construction industry has faced a steep increase in costs, with the construction cost index rising by 26% over the past three years, a rate that doubles the country's inflation during the same period. This surge is attributed to the increased prices of key construction materials and labor wages. The construction cost index, which reflects the price changes in materials, labor, and equipment used in construction projects, stood at 153.26 in December of the last year, marking a 3.2% increase from the previous year.

The escalation in construction costs has been influenced by a combination of factors, including increased liquidity in the market during the COVID-19 pandemic and the impact of the Russia-Ukraine conflict on the prices of construction raw materials. Notably, the price of Portland cement, a critical material in construction, rose by 23.6% in 2022 and continued to climb by 9.1% last year. Similarly, the price of ready-mix concrete and other materials has seen significant increases, alongside a notable rise in construction workers' wages.

This trend poses challenges for the construction sector in South Korea, affecting the overall cost of building projects and potentially impacting the pace of infrastructure development and real estate projects across the country.

Source:
중소기업신문

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