Construction Material Prices Surge in South Korea, Impacting the Construction Industry

Over the past three years, South Korea has seen a significant increase in construction material prices, with cement and rebar experiencing sharp rises, leading to concerns within the construction industry.

Construction Material Prices Surge in South Korea, Impacting the Construction Industry
Photo by Guilherme Cunha / Unsplash

In South Korea, the construction industry is facing challenges due to a steep increase in the prices of key construction materials over the past three years. According to a seminar titled "Construction Material Supply Conditions and Policy Improvement Measures" held by the Korea Institute of Construction Technology and the Korea Construction Policy Research Institute, the price index for construction intermediate goods has risen by 35.6% in the last three years. This increase is notably higher than the producer price index's rise of 22.4% during the same period.

The surge in material costs has significantly impacted the cost structure of the construction industry, with material costs accounting for 31.2% (approximately 134.9 trillion won) of construction industry costs in 2022, an 18% increase from 2018. Specifically, the prices of concrete and cement, the most commonly used construction materials, have risen by 34.7% and 54.6% respectively. Other materials such as rebar (64.6%), shaped steel (50.4%), galvanized steel plate (54.1%), and construction metal works (99.5%) have also seen substantial price increases.

This sharp rise in construction material costs has led to delays and supply disruptions at construction sites nationwide, exacerbating conflicts between construction companies and the steel and concrete industries. The seminar highlighted the need for a stable supply system utilizing big data and predictive analytics to mitigate these challenges and ensure the construction industry's sustainability.

Source: Newsis