Canada Wood Today | The Canada Wood Group

Korea Economy, Housing, & Lumber Shipments

Tai Jeong

By Tai Jeong

Technical Director, Canada Wood Korea

September 3, 2014

IMG_7630Owing to the economic recovery of advanced countries, South Korea’s exports amounted to US$48.42 billion in July, up 5.7% from the same month last year, while imports rose 5.8% on-year to $45.9 billion resulting the country’s trade surplus widened slightly to $2.52 billion from $2.45 billion in July 2013. July also marked the 30th consecutive month the country has posted a trade surplus.

South Korea’s inflation stays below 2% (be more specific 1.6%) for the 21st consecutive month in July, sparking fears that it could plunge the country into a Japanese-style economic stagnation. The low inflation is attributable to a severe slump in domestic demand.

The South Korean won has continued to strengthen against the US dollar this year, hitting a six-year high in July. The appreciation of South Korea’s currency is caused by its large trade surplus and excessive foreign reserves.

The exchange rate for Canadian Dollar averaged at 950.94won in July, 2014, dropped 12.16 % from 1,082.61 in July, 2013 and slightly up by 0.98% from 941.73 in one month earlier.

Housing Construction

Korean Housing Starts Summary and Market Condition:

South Korea’s housing starts in year-to-date June of 2014 increased 8.3% to 45,994 buildings from a year earlier 42,470 buildings. Housing permits in the same period also increased 7.8% to 50,283 buildings from a year earlier 46,624 buildings.

The number of wood building permits and wood building starts for the first six months in 2014 also increased 11.8% to 6,431 buildings and 8.9% to 5,623 buildings respectively compared with the same period in 2013.

Wood Building 2008 2009 2010 2011 Jan.-June Jan.-June (%)
2013 YTD 2014 YTD
Number of Permits 10,184 11,022 10,922 11,382 5,750 6,431 11.8
Number of Starts 8,191 9,503 9,558 10,159 5,165 5,623 8.9

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

In addition to the eased mortgage loan and a key interest rate cut by South Korean government as measures to revive the stagnant real estate market, the MLIT further announced a set of measures to ease rules on house reconstruction on August 25th. This new set of measures include cutting the minimum age of housing units, especially for apartment, open to reconstruction to 30 years regardless safety issues from the former 40 years with safety issues while also easing other requirement for reconstruction to allow development of old housing units with what it called inconvenient living conditions, such as a lack of parking spaces and excessive floor noise.

Lumber Shipments

BC softwood lumber export volumes to South Korea in both May and June 2014 showed huge increases and resulted year to date June of 2014 export volume increased 8.98% to 140,998 cubic meters as compared to 129,374 cubic meters for the same period in 2013.

Export value for the year to date June of 2014 surpassed that of the same period of 2013 showing a 12.62% increase to CAD$37.356 million as compared to CAD$33.171 million in 2013.

BC Softwood Lumber Exports to South Korea

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korea lumber shipments