In 2023, overseas construction orders totaled US$33.31 billion, exceeding US$30 billion for the fourth consecutive year. However, it is just short of the target of US$35 billion.
According to the Ministry of Land, Infrastructure, and Transport (MOLIT) on Jan. 8, 321 Korean overseas construction companies won 606 contracts worth US$33.31 billion in 95 countries last year. The amount increased by US$2.33 billion from US$30.98 billion in 2022. The value of foreign construction orders decreased from US$35.1 billion in 2020 to US$30.6 billion in 2021 before increasing for the second consecutive year in 2022 and 2021.
By region, orders from the Middle East reached US$11.4 billion, accounting for 34.4%. This was followed those from North America and the Pacific region (31.0%) and those from Asia (20.4%).
MOLIT attributed a recovery in orders for Korean builders from the Middle East to last year’s improved diplomatic relations. In particular, the ministry explained that the recovery in orders from the Middle East was driven by Saudi Arabia’s Amiral Petrochemical Plant (US$5.08 billion) and Jafura Gas Plant (US$2.37 billion) Projects, which were highlighted during shuttle diplomacy between Korean President Yoon Suk-yeol and Saudi Crown Prince Mohammed bin Salman. Amiral Petrochemical Plant is the largest project ever awarded to a Korean company by the Middle East kingdom.
By country, the U.S. accounted for 30% of exports at US$10 billion. This was followed by Saudi Arabia at 28.5% and Taiwan at 4.5%.
This was the first time the United States became the number one country to give construction orders to Korean builders after the Korean government started compiling related data in 1965. One of the reasons why Korean construction firms are winning many orders from the United States is due to supply chain reorganization. Construction orders increased as Korean companies set up semiconductor, electric vehicle, and battery plants in the United States in response to the U.S. Inflation Reduction Act (IRA).
In addition, the Plant, Infrastructure, and Smart City (PIS) Fund which was created by a public-private partnership to respond to changes in the overseas order-taking environment helped Korean builders land construction orders from the United States as well. SK ecoplant won an order for the construction of the Concho Solar Project in Texas (US$500 million) in which the fund invested US$8 million. The PIS Fund, worth 1.5 trillion won, will identify investment projects related to Korean companies and execute investments sequentially.
By type of construction last year, exports were dominated by industrial facilities (US$15.8 billion or 47.4%), construction (US$12.1 billion or 36.5%), and civil engineering (US$1.9 billion or 4.7%).
By business type, contracting projects accounted for the majority of such projects with US$31.8 billion (95.6%). Investment and development projects stood at US$1.46 billion (4.4%), up slightly from US$1.02 billion in 2023.