Construction Industry 'Boritgogae'... Decline in Building Permits, Groundbreaking, and Completion in Chungnam Region

Graph of construction, permits, groundbreaking, and completion status in Chungnam region for 2019 compared to 2018. Unit: 1000㎡. Provided by Chungnam Province.

[Asia Economy (Naepo) Reporter Jeong Il-woong] It has been confirmed that the construction permit, groundbreaking, and completion areas in Chungnam Province all decreased last year due to the recession in the construction industry.

According to Chungnam Province on the 28th, compared to 2018, the construction permit area decreased by 19.3%, the groundbreaking area by 13%, and the completion area by 9.8% in the construction permit, groundbreaking, and completion status within the province last year.

Specifically, the construction permit area in Chungnam decreased from 1,062,700㎡ in 2018 to 857,995㎡ last year. In the construction permit status by usage, residential permits totaled 4,950 cases (total floor area 2.19 million㎡), a decrease of 1,424 cases (22.3%) compared to 2018; commercial permits decreased by 402 cases (10.8%), and agricultural and fishery permits decreased by 573 cases (16.7%).

The groundbreaking status showed a similar situation. Compared to 2018, residential groundbreaking decreased by 972 cases (18%), and commercial groundbreaking decreased by 250 cases (9%), failing to avoid the recession phase. However, agricultural and fishery groundbreaking increased by 268 cases (10%) compared to 2018, showing a different trend from residential and commercial groundbreaking.

In terms of completion by usage during the same period, residential completions decreased by 873 cases (16%) and commercial completions by 226 cases (8.3%), whereas agricultural and fishery completions increased by 729 cases (39%).

The hardship faced by the construction industry in Chungnam is interpreted as a result of weakened investment sentiment due to the economic downturn and strengthened government real estate regulations, and this trend is expected to continue for the time being.

An official from the province said, “The overall decline in local construction orders last year is attributed to a sharp drop in private housing orders due to the housing market downturn. In particular, since this downward trend is expected to continue for the time being, the province plans to closely monitor related developments.”