Construction Market Sentiment Declines for Two Consecutive Months... February Expected to Rebound

January Construction Industry CBSI Falls to 81.2... Significant Seasonal Impact from Severe Cold

On the afternoon of the 8th, a reconstruction construction site of an apartment in downtown Seoul

Due to the seasonal impact of the severe cold, expectations for improvement in the construction market at the beginning of the year have declined for the second consecutive month.

The Korea Construction Industry Research Institute announced on the 1st that the Construction Business Survey Index (CBSI) for January recorded 81.2, down 3.4 points (p) from the previous month.

If the CBSI falls below the baseline of 100, it means that more companies view the current construction market situation pessimistically than optimistically.

The CBSI showed a slight decline of 0.7p in December last year due to the resurgence of COVID-19. In January, it also decreased slightly, showing a decline for two consecutive months.

Typically, in January, construction volume decreases, causing the index to drop by 5 to 10 points compared to the previous month, which is interpreted as a significant seasonal effect.

Overall CBSI Trend

However, the decline was not large, and the index itself remained around the 80 level, higher than the average of the past 10 years (71.9), indicating that the construction market situation has not deteriorated significantly.

Park Cheol-han, a research fellow at the Korea Construction Industry Research Institute, said, "The BSI of large companies, which led the index decline at the end of last year, improved compared to the previous month, and the recent government moves to expand housing supply mainly in the metropolitan area seem to have positively influenced the index."

The BSI for large companies rose 25.0p from the previous month to 100.0, the BSI for medium-sized companies fell 11.7p to 86.0, and the BSI for small companies plunged 27.4p to 53.6.

The new construction orders BSI was favorable, exceeding the baseline of 100 in November and December last year, but in January this year, it sharply dropped 38.0p from the previous month to 72.4.

Research fellow Park explained, "Orders decreased compared to the previous month, and due to heavy snowfall and other factors, the BSI for small companies was very poor, which seems to have been reflected complexly in the overall index."

Meanwhile, the index for February 2021 is forecasted to rise 17.1p from the previous month to 98.3.

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