Canada Wood Today | The Canada Wood Group

Korea Economy, Housing and Lumber Shipments

Tai Jeong

By Tai Jeong

Technical Director, Canada Wood Korea

September 18, 2013

Economic Update:

The South Korean economy grew 1.1% in the second quarter of 2013 from three months earlier owing to the strong government effort to stimulate the slowing economic recovery by expanding fiscal spending and front-loading its budget.

South Korea’s trade surplus slightly widened in July showing $2.71 billion with $45.84 billion in export, up 2.6% and $43.13 billion in import, up 2.7% from the same month last year.

Annual growth of South Korean households’ monthly income picked up in the second quarter from three months earlier showing a 2.5% increase to averaged 4.04 million won (or US$3,608) from a year earlier, but their spending still remained weak.

South Korea’s consumer prices index rose 1.4%, the fastest pace in five months mainly due to the on-year gain in oil prices, in July from a year earlier, picking up from a 1% on-year gain in June.

South Korea’s jobless rate remained unchanged at 3.1% in July from a month earlier but job creation slightly quickened, raising hopes that labor market conditions are improving.

The dollar closed at 1,039.68 won on August 27, 2013, decreased 7.47 % from 1,123.65 the same date in 2012 and down 2.02 % from 1,061.16 one month earlier.

Housing Update:

Korea’s housing starts in the first six months of 2013 decreased 12.7% to 46,624 buildings from a year earlier 53,426 buildings.

The number of wood building permits and wood building starts for the first six months in 2013 also decreased 8.9% to 5,750 and 7.5% to 5,165 respectively compared with the same period in 2012.


Source: Ministry of Land, Infrastructure and Transport (as a percent compared to previous year same month and period)

As the rental paradigm of Korea shifts from jeonse (large-sum deposits) to monthly rent, the demand for new homes rises so as the number of new apartments provided by construction firms is on the rise. According to an online real estate information provider, about 250,000 households are expected to move into new apartments next year.

Lumber Shipments

Canadian SPF exports to South Korea for the first six months of 2013 significantly decreased 28% to 50,369 MFBM affected by overall housing market slump and treated wood issue in Korea and losing price competiveness due to increased Canadian lumber prices.

Although shipment volumes to Korea from European countries are still relatively small, European lumber volumes shipped to Korean wood market were more than three times higher this year than in the same period in 2012. January-July accumulative shipment from Austria was increased 323.5%, Germany 193.8% and Finland 37% compared with the same period in 2012.

And the demand for wood products from these European countries is expected to go up in the coming years.