"Summer Construction Volume Decline" July CBSI Slightly Drops, Approaching Upper 70s

"Concerns Over Private Land Sale Price Ceiling System, Expected to Drop by 6.6 Points in August"

[Asia Economy Reporter Yuri Kim] The Construction Business Survey Index (CBSI) for July recorded a slight decline from the previous month to the high 70s, due to seasonal factors such as a decrease in construction volume during the summer season. When the CBSI falls below the baseline of 100, it indicates that more companies view the current construction market pessimistically than optimistically.

The Korea Construction Industry Research Institute announced on the 3rd that the CBSI for July dropped 1.9 points from the previous month to 77.5. The CBSI had been sluggish, recording levels in the 60s from February to May due to the impact of the COVID-19 pandemic, but rebounded 14.6 points in June to 79.4 compared to the previous month. However, it declined again by 1.9 points in July.

The decline was attributed to seasonal factors, such as a reduction in construction work during the peak summer heat. Additionally, the issuance of public construction projects aimed at economic stimulus fell short of expectations, which was also identified as a cause. Park Cheol-han, Associate Research Fellow at the Korea Construction Industry Research Institute, stated, "Typically, the index decreases by about 2 to 5 points in July due to the seasonal reduction in construction volume during the peak summer heat, and this seasonal effect was reflected in the index. Especially, the July index forecast made in June was above 80 (84.1) due to expectations of an increase in public construction projects for economic stimulus. However, it appears that the actual volume of orders did not meet those expectations."

The CBSI for August is projected to fall 6.6 points from July to 70.9. Associate Research Fellow Park diagnosed, "Along with the seasonal effect of the summer off-season, concerns about a contraction in construction work, particularly in building construction, due to the end of the July grace period for the price ceiling system for pre-sale apartments, seem to have been reflected in the index."

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