Business Sentiment Worsens for Construction Firms... Negative Outlook Persists

It has been found that construction companies are feeling a further deterioration in business conditions.

According to the Construction & Economy Research Institute of Korea (CERIK) on June 5, the Construction Business Survey Index (CBSI) for last month was recorded at 74.3, down 0.5 points from the previous month. The CBSI quantifies the business sentiment felt by construction companies. A reading below 100 indicates that more companies view the current business situation pessimistically, while a reading above 100 means more companies are optimistic.

Lee Ji-hye, a research fellow at CERIK, said, "The perceived construction business conditions in May declined slightly compared to the previous month, and the index remains well below the benchmark of 100, continuing a sluggish trend."

Except for the funding index, which rose by 2.1 points to 78.6, all detailed performance indices fell compared to the previous month. The construction progress index recorded the largest drop, falling by 9.4 points to 75.6. The order backlog index and the construction receivables index also fell by 8.2 points and 7.2 points, respectively.

By construction type, the new order index for civil engineering rose by 1.6 points to 67.3, and for housing, it increased by 3.8 points to 74.6. However, non-residential building construction fell by 3.0 points to 66.1.

By company size, the large company index (100.0) remained the same as the previous month, but the small company index fell by 0.3 points to 63, and the medium-sized company index dropped by 1.1 points to 60.4.

By region, Seoul fell by 3.3 points to 90.1, while other regions rose by 0.6 points to 63.8. However, the outlook index for June was surveyed at 75.3, which is 1.0 point higher than the performance index for May.