Construction Companies' Sentiment Index Stays Above 60 for 3 Consecutive Months... First Time Since COVID-19 Outbreak

"Decrease in Construction During Summer, Overall Negative Sentiment"

[Asia Economy Reporter Noh Kyung-jo] The Construction Business Survey Index (CBSI) has struggled to stay above the 60-point mark for three consecutive months. Although the seasonal effect of reduced construction work during the summer played a role, overall corporate sentiment is also interpreted as unfavorable.

The Korea Construction Industry Research Institute announced on the 1st that the CBSI for August recorded 66.7, down 1.2 points (p) from the previous month. After falling 18.7p to 64.7 in June, the CBSI slightly recovered by 3.2p in July but dropped again by 1.2p in August. This is the first time since the COVID-19 outbreak from February to May 2020 that the index has remained below 60 for more than three months.

The CBSI indicates that if the index is below the baseline of 100, more companies view the current construction market pessimistically than optimistically; if it is above 100, the opposite is true.

The August new construction orders (BSI) fell 10.6p from July to 70.0, marking a decline for five consecutive months. By company size, the BSI for large and medium-sized companies rose by 2.3p and 1.6p respectively compared to the previous month, but it dropped by 8.4p for small businesses.

Meanwhile, the CBSI forecast for September is expected to rise by 15.1p to 81.8. Park Cheol-han, a research fellow at the Korea Construction Industry Research Institute, explained, "In September, the index often rises due to seasonal factors following the peak summer heat."

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