Market Trends of south korea sealants Industry
Rising investment in residential construction along with government initiatives will augment the sector
- The South Korean construction industry is projected to record a CAGR of about 2.49% during the forecast period (2022-2028). In South Korea, in 2018, the construction industry was struggling, and no signs of recovery were noticed in 2019. In 2018, construction investment declined by 4.2% compared to 2017, and it further contracted by around 3.2% in 2019. This decline was due to reduced infrastructure spending, an increase in minimum wages, tighter housing regulations, and government policies.
- The slowdown in economic growth has been further impacted by the COVID-19 outbreak, which is further delaying the country’s chances of economic recovery. However, the industry is expected to be supported by government efforts, which are expected to revitalize the economy and improve investor and consumer confidence. The construction industry contracted by around 3% in 2020 due to the COVID-19 outbreak and slower economic growth.
- The construction activity in the residential sector in South Korea was likely to decline further in 2020. Residential building permits decreased by about 25% in 2019, impacting licenses in 2020 and mid-2021. However, this is expected to be a temporary situation and is expected to recover during the forecast period. However, the industry is expected to be supported by the government’s efforts, which may revitalize the economy and subsequent improvements in investor and consumer confidence. These factors are expected to increase the construction industry in the country.
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Rapid growth of electric vehicles to boost the automotive sector
- The South Korean automotive industry is the seventh-largest in the world, with a production share of over 4.5% in the first half of 2021. The automotive industry in the country is heavily dependent on exports. As exports decreased, automobile production decreased for the fourth straight year. In 2019, automotive production in the country declined by 1.9% to 3.95 million vehicles, compared to the previous year’s 4.03 million vehicles. The decline in production was due to a decrease in domestic and international sales. The automotive industry is expected to decline further due to COVID-19, impacting sales and production until early 2021.
- In 2019, the country recorded about 39,50,614 units of vehicles produced, which drastically reduced to 35,06,774 units in 2020, accounting for a decline of about 11% owing to the COVID-19 pandemic. The variation in automotive production between 2019 and 2021 recorded around 12%, whereas between 2020 and 2021, the variation recorded around -1%.
- Currently, there are several developments related to increasing electrification adoption in the country, due to which the country has largely focused on the production of EVs. The accumulated number of electric vehicles in South Korea surpassed the 300,000 mark in the second quarter of 2022, taking 1.2% of the total number of registered vehicles in the country. Hyundai Motor Group, one of the largest car manufacturers in the country, has taken steps to open new production facilities to increase EV production in the country. The growing adoption of sustainability in the country may boost the growth of the automotive sector in the coming years.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Growing MRO services for commercial and defense aircraft will drive the industry size
