Korea Economy, Housing Construction and Lumber Shipments
Although external risks such as the global economic slowdown, uncertainties over the U.S. interest rate policy and instability in emerging markets are still weighing on the South Korean economy that relies a lot on exports, South Korea’s economy seems to be steadily rebounding as some major indicators are showing signs of improving from their earlier marked setbacks.
South Korea is now the world’s 6th largest exporter after China, U.S., Germany, Japan and Netherlands sharing 3.46% of world trade in 2015. South Korea’s trade rankings moved from 12th in 2008 to 9th in 2009 and then to 7th in 2010. 6th is the highest the country has ever reached.
South Korea attained its 3rd largest trade surplus in March, 2016 and extended the surplus streak to 50 consecutive months, as imports shrinking at a faster clip than exports. Exports fell 8.1% on-year to US$43 billion in March, while imports nosedived 13.9% to US$33.2 billion, resulting US$9.8 billion of trade surplus, an 18.6% on-year jump from US$8.3 billion a year earlier.
South Korea’s consumer prices rose 1.0% in March from a year earlier, slowing slightly from the 1.3% on-year gain in February. The nation’s overall unemployment rate dropped to 4.3% in March from the previous month’s 4.9%, with the number of newly employed people rebounding to over 300,000.
The exchange rate for Canadian Dollar averaged at 898.37 won in March, 2016, up by 1.78% from 882.70 won in March, 2015 and increased by 1.82% from 882.30 won in one month earlier.
Reflecting the rise in demand for dwellings, South Korea’s housing starts in year-to-date February of 2016 remarkably increased 21.8% to 12,654 buildings from a year earlier 10,389 buildings. Housing permits in the same period jumped 34.9% to 15,610 buildings from a year earlier 11,575 buildings, amid the South Korean government’s efforts to prop up the local real estate market.
February’s sharp rise is driven by a robust gain in permits issued in the capital region, including Seoul and its surrounding area in Gyeonggi Province, that are home to nearly 50% of the country’s population of 50 million.
The number of wood building permits and wood building starts in year-to-date February of 2016 also increased 14.4% to 2,138 buildings and 25.2% to 1,684 buildings respectively compared with those in 2015.
Unlike a robust gain in both housing starts and permits for the first two months of 2016, South Korea’s home sales for the first three months of 2016 slid 26.1% on-year to 199,483 signaling that the local real estate market is rapidly cooling down from a market boom in 2015.
South Korea’s property market was on a roll throughout last year on the back of a series of government measures to revitalize the housing market and the entire economy, which include lifted reconstruction regulations and eased financial hurdles to let people easily borrow money and buy or rent houses.
BC softwood lumber export volume to South Korea for the first two months of 2016 sharply increased 60% to 50,581 cubic meters as compared to 31,610 cubic meters in 2015.
As a consequence of increased export volume, export value for the first two months of 2016 also increased but increased only 37.28% to CAD$14.152 million as compared to CAD$10,309 million in 2015, mainly due to lowered Canadian lumber export price in that period.