First Half Overseas Construction Orders Reach 5-Year High... Hyundai Engineering & Construction Leads in Middle East

Positive Mode in the Second Half... Economic Situation Volatility Requires 'Caution'

Overseas construction contract awards in the first half of this year reached the highest level in the past five years. Hyundai Engineering & Construction led the strong performance by securing a $5 billion plant project in Saudi Arabia at the end of last month.

Abdulkarim Al-Ghamdi, Vice President of Aramco (front row center), and Yoon Young-joon, President of Hyundai Engineering & Construction (front row right), are signing the Amiral project contract at Aramco headquarters in Dhahran, Saudi Arabia, on June 24 (local time). Won Hee-ryong, Minister of Land, Infrastructure and Transport (back row center), is observing the signing. / Photo by Hyundai Engineering & Construction

According to the Overseas Construction Comprehensive Information Service of the Overseas Construction Association on the 9th, overseas construction contract awards in the first half of this year amounted to $17.3 billion, a 44% increase compared to the same period last year. This is the largest scale since 2018, when $17.6 billion was recorded.

The number of contracts awarded and construction projects were 290 and 2,477 respectively, up 6% and 17% from the same period last year. The number of countries entered increased by 7% to 81. By region, the Middle East ranked first with $6.6 billion, accounting for 38.3% of total contract awards. North America and the Pacific achieved $5 billion (29.3%) thanks to the expansion of domestic companies' manufacturing plant investments. On the other hand, Asia, which was first with $6.7 billion (55.9%) in the first half of last year, recorded only $4 billion (23.4%) in the first half of this year.

Concerns about overseas construction contract awards were significant until just two weeks ago, as the performance was only $8.8 billion at that time. However, the mood reversed when Hyundai Engineering & Construction secured the Saudi Amiral petrochemical plant project worth over 6 trillion won.

Riding this momentum, there are expectations that contract awards will expand in the second half of the year, centered on the Middle East region. International oil prices have remained at around $70 per barrel for over two years, leading to increased orders in the oil and gas sector in the Middle East and North Africa (MENA) region. In particular, the MENA construction market is led by Saudi Arabia, with upcoming projects, including Neom City, amounting to 687.6 billion won. Regarding Saudi Arabia, South Korea has formed a 'One Team Korea' led by the government along with private companies to visit the site and continues to show sustained interest.

However, caution is also required regarding threats such as economic recession and geopolitical instability. The United States has left open the possibility of two additional interest rate hikes this year, and the likelihood of an economic downturn is increasing in Europe and elsewhere. Son Tae-hong, a research fellow at the Korea Construction Industry Research Institute, said, "There are mixed positive and negative views on the economic recession, and the overseas construction market's order environment may change depending on the global economic developments," adding, "We need to respond to increased volatility."

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