South Korea - Country Commercial Guide
Construction Services
Last published date:


According to the Construction Association of Korea (CAK) and the Construction & Economy Research Institute of Korea (CERIK), the Korean construction industry is expected to value $166 billion (KRW 207 trillion) in 2023, down 6.7 percent from 2022. The industry is slowing down after peaking in 2021 at $185 billion (KRW 212 trillion) and $178 billion (KRW 230 trillion) in 2022. These figures include civil engineering, public and private infrastructure, and design services.  

The slowdown represents a larger trend resulting from the Bank of Korea’s efforts to tame inflation. While inflation is easing, the government will likely maintain its current monetary policy, reducing construction on the peninsula.

Public-sector orders are projected to gross $44 billion, down 0.6 percent from the previous year, as civil and non-residential construction orders face a budget cut of 11.8 percent this year. However, due to cost increases in 2022, some projects were postponed to 2023, mitigating the market decline. Activities in the public housing sector are expected to increase due to the government’s decision to normalize supply.

Sluggishness is expected across all construction categories in private sector construction. For example, civil engineering is projected to fall by 4.5 percent due to less demand for industrial construction. While petrochemical plant construction is on the rise, semiconductor factories will decrease as global semiconductor makers Samsung Electronics and SK Hynix reduce their capital expenditures by 16.6 percent to $42 billion next year. The Korean government is planning to provide tax breaks for the semiconductor industry by as much as 25 percent, up from 16 percent, to bolster the industry.

Unsold residential units caused by rising interest rates will hamper any signs of recovery in, except for large-scale reconstruction orders in Seoul.  Non-housing/commercial construction orders are projected to decline by 13.1 percent, this year’s steepest fall in the sector. Exacerbating this business environment is a surge in project finance loan delinquencies.

The industry’s biggest issue has been the rising cost of construction materials and services. According to Korea’s Producer Price Index (PPI), the average material cost jumped 19 percent in 2021 and an additional 15 percent in 2022. However, not all construction materials have been affected equally. The price of steel and metal rose by approximately 43 percent in 2021, and the cost of cement and ready-mixed concrete increased by 18 percent in 2022. Similarly, general construction costs, including labor costs, also increased by 3.8 percent in 2020, 14 percent in 2021, and 7 percent in 2022. Industry experts forecast this trend will continue in 2023.

Despite these downward domestic trends, Korea’s international construction industry remains a key economic driver and a critical source of foreign currency. Korea’s overseas construction business is important for its local construction industry and is led by large conglomerates, also known as “chaebol” companies. Korea’s cumulative value of construction overseas contracts exceeded $940 billion, mainly attributed to the Middle East and Asia Pacific construction boom. Approximately 14 percent of Korean construction firms’ total revenue in 2022 was generated from services overseas. Until recently, Korean construction firms had very little presence in the U.S. market. However, a number of Korean conglomerates have announced significant investments in the U.S. in critical industries such as semiconductors and EV batteries in recent years, prompting their construction arms to seek opportunities for additional U.S. revenue. These Korean-led investment projects could yield opportunities for U.S. companies in the construction/engineering and equipment sectors to assist with the local procurement needs.

Best Prospects

The U.S. is considered a global leader in engineering, construction services, project financing and exporters of building information modeling solutions. Companies with price-competitive technologies and services should have the potential to penetrate the market in the following areas:

Engineering services for Korean companies establishing plants in the United StatesProject financingBuilding Information Modeling (BIM) software


Korean “chaebol” companies actively partner with international companies for engineering, procurement, and construction (EPC) overseas. Additionally, ample opportunities await, as Korean firms seek to strengthen their project funding. U.S. firms should partner with qualified Korean firms with strong sales networks and a robust understanding of the regulatory issues in their fields. To maximize opportunities, it is crucial to build strong relationships and cultivate an extensive network of industry leaders and experts, as some opportunities arise directly from clients. It is especially valuable to connect with Korean partners who possess in-depth knowledge of the procurement process and the global construction market. Demand for leading Building Information Modeling (BIM) solutions is also forecast to increase as the industry’s passive attitude toward BIM and smart construction changes. In order to catch up with foreign competition, the Korean Ministry of Land, Infrastructure and Transport (MOLIT) is pursuing policies to apply BIM design to all domestic construction by 2025. Therefore, the demand for leading BIM software is expected to increase.


Industry Conferences and Events

·        Global Infrastructure Cooperation Conference.

Key Contacts

·        Construction Association of Korea (CAK).

·        International Contractors Association of Korea (ICAK).

·        Ministry of Land, Infrastructure, and Transport (MOLIT).

·        Korea Agency for Infrastructure Technology Advancement (KAIA).


Local Contact

U.S. Commercial Service Korea   
U.S. Embassy Seoul
188 Sejong-daero, Jongro-gu
Seoul 03141, Korea
Tel: 82-2-397-4535