Korea Economy, Housing & Lumber Shipments
South Korean Economy
South Korea is now the world’s 6th-largest exporter in 2015 after China, the U.S., Germany, Japan and Netherlands, which is the highest ranking the country has ever reached. South Korea’s trade rankings moved from 12th in 2008 to 9th in 2009 and then to 7th in 2010. Shipments from South Korea totaled US$526.9 billion in 2015, down nearly 8% from a year ago as global markets slumbered but its share in world trade grew by 0.11%-point to 3.46%, pushing the country one notch up to 6th.
Albeit this cheering news, South Korea’s exports outlook looks grim on weak global demand on top of low oil prices with outbound shipments expectation of 0.5% fall in 2016 from a year ago.
South Korea’s exports plummeted 18.8% to US$36.6 billion in January from a year earlier, the largest year-on-year drop in 6 years, extending their losing streak to 13 months. Imports, meanwhile, dived 20% on-year to $31.4 billion, with the trade surplus reaching $5.2 billion in January.
Domestic consumption, which has propped up the country’s economic growth in the latter half of 2015, is showing some signs of a slowdown in 2016 as the effect of the government-led tax benefits and nationwide discount events waned.
The consumer price index rose 0.8% in January, growing less than 1% for the first time in three months.
South Korea’s jobless rate reached 3.7% in January, up from 3.2% in December due mainly to seasonal factors.
The exchange rate for Canadian Dollar averaged at 845.06 won in January, 2016, down 6.34% from 902.29 won in January, 2015 and slightly down by 1.35 % from 856.66 won in one month earlier.
South Korea’s housing starts in 2015 remarkably increased 21.9% to 111,926 buildings from a year earlier 91,854 buildings, a sign that the country’s real estate market is continuing to make headway. Housing permits in 2015 also increased 21.1% to 123,362 buildings from a year earlier 101,894 buildings.
The number of wood building permits and starts in 2015 increased 17.3% to 15,393 buildings and 18.3% to 13,595 buildings respectively compared with those in 2014. Both wood building permits and starts in 2015 are the highest numbers the country has ever reached and these numbers are only reflecting wood buildings that are over 100 m2 in architectural area.
South Korea’s housing market continued its upside mode in the fourth quarter of 2015 on the back of a government-led stimulus and low borrowing costs.
Home prices in the country rose an average of 4.4% on-year in the 4th quarter of 2015, up from a 4.1% on-year gain in the previous quarter and home transactions hit 292,000 cases during the 4th quarter of 2015, up 0.1% from a year earlier.
For the whole of 2015, home transactions jumped 19% on-year to 1.2 million, with the housing prices gaining 4.4%, led by the South Korean government’s decision to lower loan-to-value and debt-to-income ratios, making it easier to borrow money from lenders, and a low interest rate.
BC softwood lumber export volume to South Korea in 2015 remarkably increased 18.73% to 299,695 cubic meters as compared to 252,422 cubic meters in 2014.
As a consequence of increased export volume, export value in 2015 also increased 21.92% to CAD$81.950 million as compared to CAD$67.217 million in 2014.
A high demand on Canadian lumber owing to a record high increase in South Korea’s WFC housing starts and a weakened Canadian dollar against Korean won and the climbing price of Canadian lumber attributed the export value to South Korea to be recorded as the all-time high figure in 2015.