GRDP Increased in Southeast and Honam Regions
But Quarterly Growth Rate Shows Downward Trend
Due to the downturn in the construction industry and a general decline in industrial production, the real gross regional domestic product (GRDP) growth rate slowed in most regions during the first quarter. In particular, construction output decreased by double digits in all five major regions, recording a nationwide figure of -12.4%, the lowest on record. Daegu saw a 3.9% decline, marking the lowest growth rate among all cities and provinces nationwide.
According to the "Provisional Real Gross Regional Domestic Product for the First Quarter of 2025" released by Statistics Korea on June 26, only three regions?Southeast (0.5%), Honam (0.3%), and the Capital Region (0.2%)?experienced an increase in GRDP growth rate compared to the same period last year. The Chungcheong region (0.0%) remained unchanged, while the Daegyeong region (-0.4%) saw a decrease. Nationwide, growth was limited to just 0.1%.
Compared to the trends in the third and fourth quarters of last year, the nationwide GRDP growth rate dropped from the 1% range to the 0% range. The Capital Region followed a similar pattern. Both the Honam and Southeast regions fell from the 2% range to the 0% range. The Daegyeong region shifted from 0% to negative territory. The Chungcheong region, after showing a downward trend in the fourth quarter of last year (-0.8%), rebounded in the first quarter of this year.
Kim Daeyu, Director General of Economic Statistics at Statistics Korea, stated, "Overall, the GRDP growth rate figures are very low," explaining that "regional economic growth has slowed." He pointed out, "The construction industry is sluggish, and both mining and manufacturing, as well as the service sector, showed low growth." However, he also mentioned, "There was also a base effect at play."
Looking at industrial production by region, in the Southeast, both the service sector (0.9%) and mining and manufacturing (1.2%) increased. In the Honam region, production in other industries such as electricity and gas (8.6%) grew, while an increase in mining and manufacturing (0.4%) contributed to GRDP growth. In contrast, in the Daegyeong region, the recent downturn in construction (-19.7%), along with a decrease in mining and manufacturing (-1.2%), led to a decline in GRDP.
Especially in the construction sector, it became a factor dragging down indicators across all regions. Construction output in all five regions recorded double-digit declines in their GRDP. The decrease was most pronounced in the Daegyeong region and Honam region (-20.5%), followed by the Southeast region (-11.5%). Nationwide, construction output fell by 12.4%, marking the lowest level since statistics began in 2015.
Director Kim explained, "The construction industry is divided into the building sector (including both residential and non-residential buildings) and the civil engineering sector, and both sectors have declined." He added, "This is due to the sluggish real estate market, and the sharp decline in construction orders in 2023 is now being reflected in construction output."
By city and province, seven regions?including North Gyeongsang (1.6%), Ulsan (1.4%), and Seoul (1.0%)?saw an increase in GRDP growth rate compared to the same period last year, while ten regions?including Daegu (-3.9%), Sejong (-1.5%), and Incheon (-1.4%)?experienced a decrease. Overall, the GRDP growth rate in the first quarter of this year was lower than in the third and fourth quarters of last year.
Director Kim stated, "In Daegu, all major sectors?mining and manufacturing, construction, and services?declined, resulting in an overall low figure." He further explained that construction output in the Daegu region dropped by 24.3%, "the lowest since records began in 2015."
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