November Construction Business Index Slightly Rebounds... Too Early to See as Recovery Trend

The Construction Business Survey Index (CBSI) for November recorded 88.4, an increase of 4.5 points compared to the previous month.

Although construction sites were somewhat contracted due to COVID-19 and the shortage of urea solution, the construction industry business index in November showed a slight increase. This was influenced by a rise in new orders compared to the previous month and an improved situation in construction payment collections.

According to the Korea Construction Industry Research Institute (KICRI) on the 1st, the Construction Business Survey Index (CBSI) for construction companies in November recorded 88.4, up 4.5 points from the previous month. The CBSI had fallen 11.0 points to 83.9 in October but rebounded slightly after one month.

If the CBSI falls below the baseline of 100, it means that more companies view the current construction market pessimistically than optimistically; if it exceeds 100, the opposite is true.

Considering adverse conditions such as the increase in COVID-19 cases in November, global material supply issues including urea solution, and the rise in the base interest rate, the index recovery is regarded as somewhat encouraging.

The Construction Progress BSI declined by 4.0 points from the previous month, indicating some difficulties in construction progress, and the Seoul construction companies’ BSI dropped 6.0 points, reflecting the worsening COVID-19 situation centered around the metropolitan area. However, the new construction orders BSI rose 8.3 points from the previous month, and the construction payment collection situation was also favorable, which is analyzed to have had a decisive impact on the index recovery.

However, since the index level is still only around the 80s, it is difficult to say that the construction market has clearly recovered. Park Cheolhan, a research fellow at KICRI, said, "The December index was recorded at 98.4, rising 10.0 points due to the seasonal increase in year-end construction volume," adding, "It is necessary to observe future trends more closely to determine whether the construction market will actually improve."

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