The weight of overseas orders to Korean construction companies is shifting from the Middle East, a traditional strong source of contracts, to Asia.
According to the International Contractors Association of Korea on Feb. 22, Asian orders were the largest at about US$12.2 billion among total overseas orders of about US$30.9 billion to Korean contractors in 2022. Orders to them from the Middle East followed with about US$9 billion. As of Feb. 21, the total amount of overseas orders in 2023 stood at about US$4.1 billion. The Pacific and North American regions posted the largest share of about US$2.2 billion, followed by Asia with about US$800 million and the Middle East with about US$300 million. However, as that was still the beginning of the year, Korean contractors’ order intake is expected to fluctuate greatly going forward.
Those in the construction industry predict that an Asian order-oriented trend is expected to stay strong again this year. According to the association, the size of the global construction market this year is expected to reach US$13.9 trillion. More than half of that, US$7 trillion, will come from Asia. This year the Asian construction market is expected to log a growth rate of 45 percent.
Korean contractors showed remarkable progress in taking orders from Asian countries in 2022, in particular, from Southeast Asian countries with Malaysia joining the top 10 club among countries around the world in terms of construction orders to the Korean construction industry. Indonesia came in first with US$3.67 billion, Saudi Arabia second with US$3.48 billion, and the United States third with US$3.46 billion. The Philippines placed 6th with US$1.62 billion, Vietnam seventh with US$1.56 billion, and Malaysia tenth with US$1.12 billion.
Korean construction companies are cutting a fine figure in the infrastructure field in regions such as Southeast Asia. Hyundai E&C, which won a 1.9 trillion won (US$1.4 billion) order for the construction of a railway through downtown Manila in the Philippines last year, plans to use its global network to develop new markets in Southeast Asia and Africa.
Samsung C&T is also seeking to land orders for infrastructure, energy, and smart cities in Southeast Asia and the Middle East. Its profitability climbed along with quantitative growth in 2022 thanks to a large-scale gas plant order from Malaysia. Moreover, it expects to yield tangible results in new business areas such as solar power plants, hydrogen energy facilities and modular construction.
