South Korea’s construction industry prepares for the 2018 Winter Olympics
According to a new report from Timetric published on the July 30, the South Korean construction market is set to expand to 2017, driven in large part by infrastructure construction in preparation for the 2018 Winter Olympics.
Much of South Korea’s industrial and economic success can be credited to the country’s commitment to infrastructure development. According to the World Economic Forum’s Global Competitiveness Report 2012–2013, South Korea’s overall infrastructure ranks 22nd of 144 global economies, with its rail infrastructure ranking 10th.
As part of the nation’s preparations for the 2018 Winter Olympic Games, the government announced an investment of KRW4.1 trillion (US$3.7 billion) on a train line connecting the central city of Wonju to the host cities of Pyeongchang and Gangneung. Work on this line is expected to be completed by 2017. The government aims to increase the percentage share of freight from 8 per cent to 19 per cent, and increase the percentage of passenger traffic from 16 per cent to 27 per cent by 2020.
According to business intelligence firm Timetric, infrastructure construction will be the fastest-growing South Korean construction market to 2017, recording a compound annual growth rate (CAGR) of 3.47 per cent over 2013−2017 leading up to the Winter Olympics. The rail infrastructure category is going to be the fastest-growing infrastructure construction category. Timetric projects that it will record a forecast-period CAGR of 3.87 per cent during the same time period.
Highlighting the slump in the domestic housing market as a key challenge to construction industry growth, Timetric emphasizes the importance of the project as a growth driver for both the nation’s construction industry and tourism sector. “This rail line is absolutely necessary for the games,” said Lim Jong Il, deputy director of the high-speed rail division at the Ministry of Land, Transport and Maritime Affairs. “The new Wonju−Gangneung railway can act as a catalyst to expedite the national rail-line projects.”