The South Korean construction industry is projected to grow at an annual average growth rate of 2.41% in real terms from 2016 to 2020, according to a report by Timetric.
Reforms in a number of sectors including rail, housing, and energy will propel the growth in the construction industry from an average annual growth rate of 0.93% in 2015.
Titled ‘Construction in South Korea – Key Trends and Opportunities to 2020’, the report reveals that the South Korean Government plans on investing more on public infrastructure to boost tourism, education, healthcare, city planning, energy, and traffic by 2019 and has announced an investment of KRW2.1 trillion ($2.0bn).
South Korea intends to enhance the connectivity among all its major cities by linking them through a high-speed rail network. As part of these reforms, authorities have decided to increase the area covered by the high-speed railway from 368km in 2011 to 2,362km by 2020, reducing the travel time to approximately 90 minutes.
The expansion project will be implemented through a public-private partnership with an investment of KRW88.0 trillion ($81.9bn).
The Timetric report also mentions that the changing global scenario will also impact the construction industry, with an increase in consumer and investor confidence and improvement in economic conditions. Construction permits for residential, industrial, and institutional buildings are also expected to further increase during the forecast period after increasing by 12.1% in 2015.
The upcoming 2018 Winter Olympic Games to be held in Pyeongchang have resulted in an investment of KRW13.0 trillion ($10.8bn) towards the construction of stadiums and other related infrastructure.