Korean construction industry at a crossroads: Between the ruins of war and the blueprint for the future > News

The agreement to end the war in the Middle East is raising expectations of ‘special reconstruction’ in the domestic construction industry. In particular, infrastructure restoration projects in the Middle East, including Iran, are clearly an attractive market considering the plant construction experience our companies have accumulated in the past. However, industry experts are wary of excessive optimism and are calling for an extremely conservative approach. The fact that Iran is a country subject to US economic sanctions still acts as a barrier to entry, and the risk of financial sanctions such as secondary boycotts can be a fatal blow to companies. As a result, a strategy that focuses on structural reorganization of the Middle East's energy infrastructure rather than simple restoration work is needed, and a cool-headed judgment is required by carefully considering actual needs such as pipelines or port facilities bypassing the Strait of Hormuz.

Contrary to macro market changes, the employment field is still going through a harsh winter. The number of construction industry employment insurance subscribers has been declining for a whopping 34 months, suggesting that the structural downturn across the industry has gone beyond a temporary recession. The manufacturing industry is also experiencing a decline in the number of subscribers for over a year, showing that the two major peaks in the employment market are collapsing. The reality that unemployment benefit payments are at an all-time high and the Employment Insurance Fund is being run with borrowed money is raising serious concerns about financial soundness. In particular, the structural imbalance resulting in the inflow of young people and the exodus of skilled workers is expected to be the biggest obstacle to the construction industry maintaining its technological competitiveness in the future.

Sparks of hope are found in unexpected places. It is encouraging to see that the recently announced first quarter GDP growth rate was 1.8%, showing that the construction industry has overcome its previous sluggishness and made progress. The boom in the manufacturing industry, centered on semiconductors, is driving facility investment, and the civil engineering and construction sector is showing signs of recovery, bringing warmth to the overall economy. In particular, nuclear power generation is being re-evaluated as a core infrastructure that determines energy security and industrial competitiveness beyond a simple power production facility. In addition to exporting large nuclear power plants, our technological prowess in the small modular nuclear power plant (SMR) field will be a powerful weapon that will help our construction companies establish a differentiated position in the global market.

Now, our construction industry desperately needs to improve its structure by moving away from the ‘quantitative growth’ method of the past and strengthening ‘qualitative substance.’ As seen in the case of Japan, the new construction-oriented paradigm is no longer sustainable under the changing demographic structure and low growth trend. Renewal and maintenance of existing buildings and conversion of business structures to focus on urban regeneration are not a matter of choice but of survival. Additionally, the payment system must be reorganized to resolve the financial deficit of the Employment Insurance Fund and a strong safety management system must be established to prevent industrial accidents. We need wisdom to proactively respond to external factors such as tax investigations by establishing a transparent management accounting system.