"Post-Heatwave Order Improvement Half of Usual" September Construction Business Index Stays Around 70

"Negative Outlook at 65.9, Down 9.4p in October"

[Asia Economy Reporter Yuri Kim] Last month, the Construction Business Survey Index (CBSI) for construction companies showed a slight improvement, maintaining the mid-70s range. This was due to improved new orders following the heatwave period. However, the pace of economic recovery remains slow, and it is expected to fall to the 60s range in October.

The Korea Construction Industry Research Institute announced on the 5th that the CBSI for September rose slightly by 1.8 points from the previous month to 75.3. The CBSI had remained in the 60s range due to the COVID-19 pandemic but rebounded by 14.6 points in June, recovering close to the 80s range. However, it fell by 1.9 points and 4.0 points in July and August respectively, recording the low 70s range, and then rose slightly by 1.8 points in September to reach the mid-70s at 75.3.

The slight improvement in the index is attributed to seasonal effects, but the extent of improvement is less than half of the average in normal years, indicating a slow pace of economic recovery. Park Cheol-han, a senior researcher at the Korea Construction Industry Research Institute, explained, "In September, the index rose due to factors such as improved new orders and construction volume after the heatwave period, and this seasonal effect is reflected in the index." However, he added, "Considering that the average increase in the index for September over the past 10 years has been around 5 points, this year's increase in September is less than half of the usual, indicating a slower pace of economic recovery."

Meanwhile, the index for October is forecasted to drop by 9.4 points from September to 65.9. Senior researcher Park said, "A nearly 10-point drop in the index in October is very unusual, and it seems that the financial situation and construction payments in October will not be favorable." He added, "We expect the situation for construction companies to worsen further."

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