The combined value of South Korea’s overseas construction orders for the past 47 years surpassed $500 billion, said a recent finding.
When including the latest $7.8 billion housing contract won by Korean builder Hanwha E&C for a new town in Iraq at the end of last month, the aggregate value of Korea’s overseas construction contracts adds up to $501.3 billion, said the nation’s Ministry of Land, Transport and Maritime Affairs (MLTM) Wednesday. This feat was achieved only 47 years since Korea won its first out-of-country order in 1965 for the Patani-Naritiwat Highway in Thailand.
By region, the Middle East was Korea’s biggest client by accounting for 60 percent ($301.9 billion) of the aggregate total, while Asia - propped up by large-scale building projects in Singapore and Vietnam - was responsible for 30 percent of the total at $147.9 billion. Contracts from Latin America and Africa added up to $16.5 billion and $16.4 billion respectively, which comes to roughly three percent each, while Europe comprised four percent of the final overseas construction value at $18.6 billion.
Moreover, Korean builders have been winning more orders as of late; the construction orders won in the past five years since 2007 accounted for more than half of the aggregate order value. At this rate, Korea will be able to secure $100 billion construction contracts annually starting from 2014 to become one of the world’s top five builders, the MLTM projected.
Meanwhile, the decline in public construction projects and sluggishness in the construction sector has caused domestic construction orders to fall as of late. At this pace, it is highly likely that the overseas construction earnings will overtake domestic earnings in the very near future. Domestic construction contracts amounted to 11.8 percent of the nation’s gross national income (GNI) in 2006, but dropped to 8.3 percent of GNI by 2011. In contrast, overseas order values edged up from 2.0 percent to 5.2 percent of GNI during the same time period.
This trend is also evident when compared to performances in other sectors. Korea’s annual construction contracts for the overseas market have outshined shipbuilding, automobile, and semiconductor exports - Korea’s main bread and butter - since 2007.