"Decrease in Public Orders, Construction Sentiment Slumps Again" January CBSI Falls Below 70

[Asia Economy Reporter Yuri Kim] The Construction Business Survey Index (CBSI) has plunged by more than 20 points, sliding down to the 70 range. This is evaluated as the sentiment that temporarily recovered at the end of the year has returned to the previous stagnant level due to a sharp decline in public construction orders. If the CBSI falls below the baseline of 100, it means that there are more companies viewing the current construction market pessimistically than optimistically.

According to the Korea Construction Industry Research Institute on the 3rd, the CBSI for January was 72.1, a sharp drop of 20.5 points compared to the previous month. This is the lowest figure in six years since January 2014, when it recorded 64.3.

The CBSI recorded 92.6 in December last year, the highest in four years and five months, due to a significant increase in orders influenced by the government's construction sector stimulus measures. However, it dropped by more than 20 points in just one month compared to the previous month, barely holding on to the 70 range.

Park Cheol-han, a senior researcher at the Korea Construction Industry Research Institute, said, "It is common for the index to fall by 7 to 10 points in January due to seasonal factors. The average decline in the January index over the past five years was also 9.4 points," but "this year’s decrease is more than twice as large as usual."

Park added, "As can be seen from the fact that the new construction orders BSI, a detailed BSI component, dropped by 22.6 points compared to the previous month, the sharp decline in public construction orders that had increased at the end of the year is analyzed to have had a decisive impact."

The February index is forecasted to rise by 11.3 points from January to 83.4. Park predicted, "The situation for new construction and financing is expected to improve somewhat compared to January, but the backlog of orders and construction receivables are expected to worsen compared to January."

This content was produced with the assistance of AI translation services.