Overseas Construction Orders Reach $33.3 Billion, "Upward Trend Expected to Continue This Year"

Surpassing 30 Billion for 4 Consecutive Years Despite Geopolitical Issues
Overseas Construction Market Size Reaches 14.6 Trillion Dollars This Year
"Middle East Construction Market Growth, Asia Expands Infrastructure Investment"

Last year, the overseas construction contract amount exceeded 30 billion dollars for the fourth consecutive year. Despite geopolitical issues such as conflicts in the Middle East, overseas orders are expected to maintain an upward trend next year.

Overseas Construction Contract Performance Trends (Source: KICT, Overseas Construction Comprehensive Information Service)

According to the Construction Industry Research Institute on the 20th, in 2023, 321 construction companies secured 606 contracts in 95 countries' construction markets, achieving an overseas construction contract amount of 33.3 billion dollars. This is an 8% (2.33 billion dollars) increase compared to the previous year. The cumulative contract amount stands at 963.8 billion dollars.

Since 2016, when overseas orders sharply declined, the average annual contract amount has recorded 30.2 billion dollars, showing a gradual recovery trend.

By region, overseas contract amounts are dominated by the Middle East and North America-Pacific, accounting for 65.3%. The Middle East leads with 11.43 billion dollars, followed by North America-Pacific with 10.31 billion dollars, Asia with 6.79 billion dollars, Africa-Europe with 3.31 billion dollars, and Latin America with 1.47 billion dollars. Notably, the North America-Pacific region's contract amount increased by 127.3% compared to the previous year (4.54 billion dollars), achieving a record high.

The Construction Industry Research Institute stated, "Most of the North America-Pacific contracts are related to production facilities of domestic manufacturers, so whether sustainability is maintained will be the key to whether it becomes a main market in the future."

By construction type, the plant sector accounted for 47.4% of total contracts. The plant contract amount increased by 20.5% from the previous year to 15.78 billion dollars. After declining since 2017, it has returned to an upward trend. The building sector increased by 40.3% compared to the previous year to 12.14 billion dollars, while the civil engineering sector decreased by 67.6% to 1.9 billion dollars compared to 5.85 billion dollars the previous year.

Global Construction Market Size and Growth Rate Trends, Regional Market Size Forecast (Source: Overseas Construction Association Policy Support Center)

This year, the global construction market is expected to grow by 6.0% from the previous year, reaching 1.46 trillion dollars. Global market analysis firm IHS Markit analyzed that the Middle East construction market will grow due to high oil prices, and the Asia region, where infrastructure investment is expected to expand, will show remarkable growth. The global construction market growth rates are 11.7% for the Middle East (669.8 billion dollars), 8.1% for Asia (6.9437 trillion dollars), and 4.5% for North America-Pacific (2.742 trillion dollars).

In particular, the order budget scale for the seven major MENA countries (Saudi Arabia, UAE, Iraq, Oman, Kuwait, Qatar, Bahrain) for 2023-2024 is 1 trillion dollars, making it a market to watch closely for overseas expansion.

Due to various variables such as the possibility of interest rate cuts and geopolitical instability, overseas construction orders this year present a coexistence of opportunities and risks. While the negative impact of interest rate hikes is decreasing and optimistic forecasts such as industrial recovery including manufacturing are present, pessimistic factors such as wars and geopolitical instability, slowing economic recovery in China, and inflationary pressures from energy and grain prices also persist.

Son Tae-hong, head of the Construction Technology Management Research Office at the Construction Industry Research Institute, explained, "Although uncertainties exist, overseas construction orders can be expected to yield positive results, supported by continuous improvement in the order environment of existing markets and an increase in investment-development type orders for infrastructure construction." He added, "Companies need to focus on expanding their market entry by enhancing market monitoring and risk management measures."

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