The number of South Korean construction firms’ business closures hit an 18-year high in 2023 amid a slumping property market, data showed Thursday.

A total of 581 general construction companies went out of business last year, up 219 cases from the previous year, according to the data from the Construction and Economy Research Institute of Korea.

The figure was the largest since 2005, when 629 general contractors shut up shop.

Of the total, 333 construction companies closed their businesses in the second half of the year, with the number reaching as high as 74 in December alone.

The data also showed six general construction companies going bankrupt last year, up one from a year earlier.

The jump in builders’ business closures came amid a prolonged slump in the country’s property market.

Construction orders came to 12.8 trillion won (US$9.7 billion) in November last year, down 26 percent from a year earlier and 9.9 percent from the prior month.

Hit by a flaccid housing market, ailing Taeyoung Engineerin
g and Construction Co., the 16th-largest builder in South Korea, has been in talks with creditors on a debt restructuring program since late December.

The local construction market is widely feared to weaken further this year due to the weak real estate market and souring project financing loans taken out by builders.

Source: Yonhap News Agency