Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Middle East clients halt placing construction orders with Korean firms
Laborers work at the site of a high-rise tower under construction in Kuwait, April 2. AFP-Yonhap
By Park Jae-hyuk
Companies may participate in post-war reconstruction
The volume of construction orders placed with Korean companies by Middle Eastern clients dropped sharply in the wake of the war in Iran, raising doubts about the government’s goal of securing $50 billion in overseas construction orders this year.
Data from the International Contractors Association of Korea released Monday showed that construction orders from the Middle East totaled $29.97 million in March, down 88 percent from the previous month.
The region’s share of total overseas orders also plunged to 3.7 percent from 56.1 percent during the same period.
With rapidly declining orders from the main market for Korean companies, the overall volume of overseas construction orders in March fell 78.9 percent year-on-year to $810 million.
“Korean construction firms have not received any orders from the Middle East this month,” an industry official said.
Due to strong demand for plants, roads and power infrastructure, Korean construction firms have long focused on winning projects in the Middle East. Since the outbreak of the war, however, clients there have delayed placing orders for large-scale projects.
Although Korean firms have tried in recent years to reduce their reliance on the Middle East by expanding nuclear power plant projects in the United States and Europe, the oil-rich region remains an important market.
In 2024, orders from the Middle East accounted for 49.8 percent of Korea’s total overseas construction orders. The temporary decline to 25.1 percent last year mainly resulted from a large nuclear plant contract in the Czech Republic.
Still, analysts expect Korean companies to benefit from post-war reconstruction projects in the Middle East.
“The war is not over yet, but most of the damaged facilities were originally built by Korean companies,” Meritz Securities analyst Moon Kyeong-won said.
“Given the typical timeline for reconstruction, Middle Eastern nations are likely to start placing orders in the second half of next year, even if the war ends within this year.”