Construction Companies' Overseas Orders Outside Top 10, 'United States' Rises to 3rd Place This Year

Increase Expected in U.S. Construction Orders... Samsung C&T's Active Role

Samsung Electronics Taylor City Foundry Plant Site
Photo by Samsung Electronics

[Asia Economy Reporter Noh Kyung-jo] The United States, which had been outside the top 10 countries in overseas construction orders for the past three years, has emerged as a new powerhouse this year.

According to the Overseas Construction Comprehensive Information Service of the Overseas Construction Association on the 14th, the U.S. ranks 3rd among 85 countries in overseas construction orders as of August this year, with $2.06936 billion. Indonesia ranks 1st ($2.52382 billion), and Saudi Arabia is 2nd ($2.33435 billion).

This is the first time the U.S. has surpassed $2 billion in overseas construction orders. Looking at recent performance, it was only $208.4 million (20th place) in 2019, and it fell out of the top 20 in 2020. Then last year, it recorded $943.23 million in orders, ranking 11th. The highest construction order amount in the U.S. was in 2015, with an annual total of $1.77199 billion.

Contrary to the continuous decline in the global construction market growth forecast, the outlook is that construction orders to the U.S. will gradually increase. Global consulting firm GlobalData projected the U.S. construction market size to grow 2.1% year-on-year to $1.6338 trillion this year.

This figure takes into account the Federal Reserve’s rapid interest rate hikes and government spending delays related to infrastructure. It is expected that inflation pressures and supply chain issues will ease starting next year.

GlobalData stated, "The U.S. construction market is expected to record an annual growth rate of 3.7%, reaching approximately $1.8994 trillion by 2026," adding, "Government spending under the Infrastructure Investment and Jobs Act (IIJA) is also expected to begin next year." The IIJA approved an additional budget of $550 billion on top of the existing $1.2 trillion spending plan in the amendment.

Among domestic construction companies, Samsung C&T is achieving results in the U.S. This is because Samsung Electronics, a group affiliate, is investing $17 billion to build a foundry (semiconductor contract manufacturing) plant in Taylor, Texas. Samsung C&T, which secured part of the construction contract last month ($1.91434 billion), is likely to continue winning orders depending on the progress of the project.

The government plans to actively support overseas construction orders. On the 10th, Won Hee-ryong, Minister of Land, Infrastructure and Transport, met with CEOs of overseas construction-related public enterprises and major domestic construction companies to promise resolving difficulties in overseas expansion and discovering related policies.

The Ministry of Land, Infrastructure and Transport will also meet with representatives of small and medium-sized enterprises soon to gather opinions. On the 30th and 31st of this month, the 'Global Infrastructure Cooperation Conference (GICC)' will be held in Seoul to continue support activities for expanding overseas construction orders by Korean companies.