Last year, the total overseas construction orders for domestic corporations amounted to $37.1 billion, falling short of the target of $40 billion. The government set a target of $50 billion for this year, an increase of 35% over last year, in line with the expansion of the overseas construction market.
According to the Korea Overseas Construction Association (KOCA), domestic corporations recorded $37.1 billion in overseas construction orders last year.
This represents an increase of 11.4% compared to $33.3 billion in 2023, marking the highest order volume in nine years since 2015 ($46.1 billion).
By region, half of last year's overseas order amount came from the Middle East. The proportion of orders from the Middle East last year recorded 49.8% of the total, expanding by 15.5 percentage points from 34.3% in 2023. This is attributed to the improved order environment in the Middle East as international oil prices stabilized. The order volume from the Middle East totaled $18.49421 billion, a 61% increase from the previous year.
Major Middle Eastern projects for domestic corporations include the Saudi Padilly gas plant packages (PKG) 1 and 4 ($6.08 billion) and PKG 2 ($1.22 billion). Following that, orders had a significant share from Asia ($7.11117 billion), Europe ($5.04721 billion), and North America/Pacific ($4.69450 billion).
However, last year's performance fell short by $2.9 billion of the government's overseas construction order target of $40 billion. KOCA analyzed that the delay in the contract for the Czech Dukovany nuclear power plant construction project affected the ability to meet the target, resulting in a performance that was approximately 8% below expectations.
The Czech nuclear power project was selected as the preferred bidder last November, led by Korea Hydro & Nuclear Power. The project is valued at $17.3 billion and is expected to finalize its main contract in March.
This year, the government has set an overseas construction order target of $50 billion, which is $10 billion (35%) more than last year. Excluding the virtually confirmed Czech nuclear power project, it means that $32.7 billion still needs to be secured.
Experts in the overseas construction industry anticipate that the Middle East market will grow by 12.3% this year to $569.9 billion, making it feasible to achieve the domestic order target of $50 billion. This is due to stable international oil prices, which could drive expansions in the green energy sector and infrastructure investments centered in the Middle East.
Son Tae-hong, head of the Construction Technology and Management Research Division at the Korea Construction Industry Research Institute, noted, "Last year, the global economy recorded better-than-expected growth due to declining inflation and sustained interest rate cuts, and this trend is likely to continue this year." He also mentioned that resolving geopolitical uncertainties in the Middle East and the possibility of peace between Russia and Ukraine would have a positive impact on alleviating uncertainties in the overseas construction market.
A KOCA official evaluated, "This year, trends such as diversification of non-oil industries by country, infrastructure improvement, digitalization, enhancing business environment competitiveness, fostering the private sector, and strengthening localization will have a generally positive impact on long-term orders in the construction sector."