Was the Effect of the 2·4 Measures Weak? Construction Business Index in February Rather Declined

CBSI Records 80.8... Down 0.4p from Previous Month
Significantly Below Initial Forecast of 98.3
"Doubts on Effectiveness of 2.4 Measures and Expectations Not Met"

Apartment complexes in downtown Seoul as seen from 63 Square, Yeongdeungpo-gu, Seoul

In February, when the government announced its 25th real estate policy, the Construction Business Survey Index (CBSI) recorded 80.8, down 0.4 points (p) from the previous month. This is interpreted as a result of the large-scale housing supply measures not having as much impact as expected.

On the 2nd, the Korea Research Institute for Construction Industry stated, "Following a 3.4p drop to 81.2 in January, the CBSI fell by another 0.4p to 80.8 in February, showing a stagnant trend hovering in the low 80s for two consecutive months." When the CBSI falls below the baseline of 100, it means that more companies view the current construction market pessimistically than optimistically.

During the January survey, the expectation that the government would soon announce large-scale housing supply measures led to a forecasted February CBSI of 98.3, an increase of 17.1p compared to January's actual figure. However, the actual figure recorded in February was 80.8, which declined compared to the previous month.

Park Cheol-han, a research fellow at the Korea Research Institute for Construction Industry, explained, "Although the government announced a public-led large-scale housing supply plan through the 2·4 measures, there were doubts about its effectiveness and evaluations that it was different from what was expected. Therefore, the index did not recover as much as anticipated."

Park added, "Unlike most volume indices such as the new construction orders BSI and construction performance BSI, which rose compared to the previous month, only the housing new construction orders BSI fell by more than 10p compared to the previous month. It seems that the policy announcement did not have a significant impact on the index."

Comprehensive CBSI Trend

However, all indices are expected to improve in March. The March CBSI is forecasted to rise by 20.6p from the previous month, reaching 101.4, above the baseline of 100, indicating that the economic situation is expected to improve compared to February.

Park explained, "In March, indices often rise due to seasonal factors such as an increase in construction orders after the cold season, and the March forecast appears to reflect these seasonal factors."