Despite Strong Overseas Construction Orders This Year, $30 Billion Target Remains 'On the Edge'

Saudi Arabia Neom City Project Construction Site / Photo by Doosan Infracore

[Asia Economy Reporter Noh Kyung-jo] With the year drawing to a close, attention is focused on whether the annual target of $30 billion in overseas construction orders can be achieved.

According to the Overseas Construction Comprehensive Information Service of the Overseas Construction Association on the 11th, the amount of overseas construction orders so far this year is $27.23655 billion, a 12% increase compared to the same period last year.

A total of 519 contracts were secured in 59 countries, with the largest order amounts by region being Asia ($11.46153 billion), the Middle East ($7.53384 billion), and the Pacific & North America ($3.52888 billion).

Domestic construction companies achieved annual overseas construction order results exceeding $50 billion from 2010 to 2014. However, the overheated bidding phenomenon known as "beehive bidding" subsided, and due to international political situations, the market experienced fluctuations for some time.

This year, expectations have risen as Middle Eastern oil-producing countries began issuing orders amid the high oil price trend triggered by Russia's invasion of Ukraine. Saudi Arabia's full-scale launch of the "Neom City Project" also contributed to creating a positive atmosphere.

The United States, which had been outside the top 10 countries for overseas construction orders over the past three years, rose to third place this year, and Egypt secured more than $2 billion in orders for the first time in 15 years since 2007, among other good news.

As a result, there are predictions that this year will surpass the record of $35.12917 billion achieved in 2020, the highest since 2016. Given that the $30 billion mark was maintained for the past two years, it is considered achievable.

However, with the $30 billion target just within reach, major construction companies reported that there are no additional order announcements expected by the end of the year. They also noted that the timing of contract announcements is decided in consultation with the ordering parties.

A representative from a construction company said, "Detailed process orders for the Neom City Project are expected to be issued starting next year, and there are no other large projects immediately. We are making efforts to continuously secure orders as 'Team Korea'."

The association’s performance aggregation deadline is also until the 23rd of this month, so there may be numerical differences. Orders received after that will be reflected in the 2023 order statistics.

Meanwhile, on the 9th, the association held the Overseas Construction Policy Advisory Committee to assess the competitiveness of domestic construction companies in securing orders and to discuss sustainable entry systems and directions. Experts advised establishing a foundation for expanding public-private partnership (PPP) projects, and focusing support on financing, construction diplomacy, support for small and medium enterprises, and technology development within a government-wide integrated support alliance.

Ahn Jin-ae, Director of the Overseas Construction Policy Division at the Ministry of Land, Infrastructure and Transport, said, "We plan to establish an integrated overseas construction information system and soon launch and operate an overseas construction order support group."

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