Canada Wood Today | The Canada Wood Group

Korea Economy, Construction & Lumber Shipments

Tai Jeong

By Tai Jeong

Technical Director, Canada Wood Korea

August 4, 2016


Coupled with Britain’s decision to leave the European Union (Brexit), the Bank of Korea revised down South Korea’s economic growth forecast from 2.8% to 2.7% this year and kept its record low interest rate steady at 1.25%, while the chief monetary policymaker warned that South Korea’s rising socioeconomic concerns, such as the low birth rate and rapidly aging population, would dampen productivity, hence growth in the future, hinting that South Korea’s economic growth could slow further.

South Korea’s trade surplus hit an all-time high to a record US$11.5 billion in June as a protracted economic slowdown dragged down imports at a faster pace than exports.

The amount of the June trade surplus up sharply from US$6.99 billion in May broke the earlier record of $10.2 billion set in November last year.  Exports fell 2.6% on-year to US$45.5 billion in June due mainly to waning demand from emerging countries and a slowdown in China, while imports retreated 7.7% to $33.8 billion.

South Korea’s consumer prices increased by less than 1% for the second month in a row in June, rekindling concerns over deflation amid a flaccid economic recovery.  Country’s unemployment rate drops to 3.6% in June, compared with 3.7% tallied in May.

The exchange rate for Canadian Dollar averaged at 908.06 won in June, 2016, slightly up by 0.89% from 900.07 in June, 2015 and up by 0.24 % from 905.89 in one month earlier.

Housing Construction

South Korea’s housing starts in year-to-date May of 2016 increased 8.9% to 47,265 buildings from a year earlier 43,398 buildings.  Housing permits in the same period also increased 13.2% to 52,266 buildings from a year earlier 46,155 buildings, amid the South Korean government’s efforts to prop up the local real estate market.

The number of wood building permits and wood building starts in year-to-date May of 2016 also increased 13.3% to 6,848 buildings and 15.1% to 6,015 buildings respectively compared with those in 2015.

On the contrary of gaining in both housing starts and permits, South Korea’s home transactions tumbled 23.4% in the first six months of 2016 from a year earlier in an apparent sign of a slowdown in the local real estate market.

For June alone, home sales fell 16.1% on-year to 92,611, marking the seventh consecutive month of on-year drop following an 18.8% plunge in the previous month.

In June, home transactions in the capital region fell 7.6% on-year, while the number for rural areas plunged 25.2%.

By type, transactions involving apartment units dropped 17.9%, with those involving row and detached houses also slipping 8.1% and 18.3% on-year.

Lumber Shipments

BC softwood lumber export volume to South Korea for the first five months of 2016 increased 3.4% to 127,944 cubic meters as compared to 123,793 cubic meters in 2015.

Export value for the same period slightly increased 0.9% to CAD$34.208 million as compared to CAD$33.903 million in 2015.

For the first five months of 2016, BC’s SPF shipment to South Korea increased 6% to 123,328 cubic meters while shipments of Hemlock, Western Red Cedar and Douglas-Fir decreased 32%, 37% and 83% respectively.