Polarization among construction companies is intensifying amid a sluggish construction market. There is an urgent call for discussions to revitalize regional construction markets.
According to the report "Improving Investment Conditions to Revitalize the Construction Industry" published on the 29th by the Korea Construction Policy Research Institute (KCPRI), polarization between the metropolitan area and provinces, as well as between large and small-to-medium construction companies, is increasing.
The report diagnosed, "Stabilizing construction costs is the most important task for the recovery of the construction market in the future; however, recent risk factors such as industrial electricity rate hikes, sharp exchange rate fluctuations, and tariff increases are significant," adding, "It is judged that discussions to revitalize regional construction markets are urgently needed."
It also stated, "This is a very important task at this point in time to alleviate difficulties faced by regional construction companies, support their growth, and revitalize the local economy."
The report called for government support to resolve polarization. It explained, "In the short term, expanding construction volume by the central government and local governments is the top priority to revitalize the regional economy and support regional construction companies," and added, "Along with this, policy support should also be prepared to assist regional construction companies in crisis."
Alternatives such as promoting joint contracting, certification systems for excellent small and medium enterprises, and support for local urban corporations were also suggested. First, through promoting joint contracting, it is necessary to support the growth of the regional economy as well as small and specialized companies, and the government and local governments should collaborate to activate certification systems for excellent regional SMEs.
The report further added, "Policies such as easing debt regulations and providing interest support for local urban corporations established to revitalize the regional economy and construction market should also be considered."
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