Overseas Orders Target of $50 Billion... "Same as Previous Years" vs "False Hope" [2025 Overseas Construction]

Controversy Surrounds $50 Billion Overseas Construction Order Target
"$17.3 Billion Czech Nuclear Power Plant Project Makes It Achievable"
"Even Without the Czech Project, Korea Has Consistently Secured Over $30 Billion"
"Heavy Reliance on the Middle East, but Orders from the Region Expected to Decrease"
"Trump's Presidency and Falling Oil Prices Could Further Reduce Middle East Orders"

The government has set a target of $50 billion for overseas construction orders this year, but opinions in the construction industry are divided. Last year, the government ended the year without even reaching the $40 billion target, achieving only $37.1 billion, but this year it raised the target by $10 billion. Considering that the main contract for the largest overseas construction project this year, the Dukovany Nuclear Power Plant construction project in the Czech Republic, is scheduled to be signed in March, some believe the target is not excessive. However, others argue that it is unrealistic given the high possibility of a decrease in orders from the Middle East due to falling oil prices.

"$17.3 Billion Czech Nuclear Power Plant Order Makes $50 Billion Possible"

On the 17th, Son Tae-hong, head of the Construction Technology and Management Research Office at the Korea Research Institute for Construction Technology, and Seo Jin-hyung, professor of Real Estate Law at Kwangwoon University, said, "The government's $50 billion overseas order target is a reasonable goal considering the Czech nuclear power plant order." The Czech nuclear power plant construction project is worth $17.3 billion, and in November last year, ‘Team Korea,’ led by Korea Hydro & Nuclear Power, was selected as the preferred negotiator. The final decision on the order will be made in March.

Director Son predicted, "Korea has already proven its competitiveness by winning the UAE Barakah nuclear power plant order, and in terms of price competitiveness, it is better than France or the United States, so the main contract for the Czech nuclear power plant will be signed."

They evaluated the government's order target for this year as appropriate. Director Son explained, "Excluding the Czech nuclear power plant order to be decided in March, the government's actual target is about $33 billion," adding, "Considering that Korea has recently secured overseas orders worth around $30 billion annually, the government is essentially aiming for the usual annual order amount."

According to the Overseas Construction Integrated Information Service, Korea's overseas construction order amount has exceeded $30 billion annually over the past five years. By year, it recorded $35.1 billion in 2020, $30.6 billion in 2021, $31 billion in 2022, $33.3 billion in 2023, and $37.1 billion last year.

Professor Seo also said, "The government actually lowered the target compared to last year." According to the Ministry of Land, Infrastructure and Transport, the government's overseas construction order target last year was $40 billion. Since this year's actual target is $33 billion, he explained that the government set a lower target than last year.

Director Son said, "Despite Korea's political turmoil, it is reasonable to set an order target at the usual level," adding, "For large-scale projects such as the capital relocation, not only construction companies but also the government must engage in construction diplomacy, so the presence of the president is important. However, there are not that many such projects. For smaller projects, the construction company's construction capability and competitiveness determine whether they win the order."

"Oil Price Drop Risk and Trumpism... Difficult Target"

On the other hand, there are criticisms that the $50 billion overseas order target this year is excessive given the high possibility of a decrease in orders from the Middle East. A securities firm official said, "The Middle East accounts for the largest share of overseas orders, but the volume of orders in this region is likely to decrease this year," adding, "Considering this, even if the Czech nuclear power plant project is won, the $50 billion target lacks realism."

He explained, "The movement of Saudi Aramco, which accounts for a significant portion of Middle East orders, is important, but new orders for processes such as oil drilling are expected to be halted," adding, "This is a result of the Saudi government's Maximum Sustainable Capacity (MSC) guideline limiting daily oil production to 12 million barrels. Saudi Arabia will complete ongoing projects for the time being and postpone projects that have not yet started."

According to the Overseas Construction Integrated Information Service, the Middle East accounts for 50% ($500.9 billion) of the cumulative overseas construction orders ($1.09 trillion). Among countries, Saudi Arabia has the largest share at 17.7% ($177.4 billion). The share of Saudi Arabia projects in annual overseas orders has steadily increased, reaching 32% ($11.9 billion) last year.

There are also claims that a more conservative order target should have been set due to the expected decrease in order amounts caused by falling oil prices. An official from a major construction company said, "Trump is about to start his term, and if oil production increases and oil prices fall, Middle Eastern clients will reduce their order volumes compared to previous years due to budget issues," adding, "It is necessary to consider that infrastructure projects expected to be ordered this year may be postponed to next year."

The official said, "Due to Trump's America First policy (Trumpism), orders in the U.S. region may also decrease," adding, "However, since the Trump administration has not yet taken office, it is difficult to predict order volumes, and we are closely monitoring the situation due to many variables."

The amount of business orders in the U.S. was below $1 billion from 2016 to 2021 but has recently increased. The order amount was $3.5 billion in 2022, $10 billion in 2023, and $3.7 billion last year. This is analyzed as a result of domestic companies expanding local factories to receive subsidies under the U.S. Inflation Reduction Act (IRA).