Korean Economy, Construction and Lumber Shipments
Economy: South Korea, the export dependent country is losing their price competitiveness of export goods especially in automobiles and steel products due to the continued Japanese yen depreciation. The weak yen has led to an average 5% decrease in the price of Japanese export products, dealing a blow to their Korean rivals’ competitiveness. South Korea’s trade surplus narrowed in April to $2.58 billion from a year earlier, compared with a surplus of $3.36 billion in March. Exports gained 0.4% on-year to $46.29 billion in April, while imports inched down 0.5% to $43.71 billion.
The country’s jobless rate stood at 3.2% in April, down from the previous month’s 3.5%. Consumer prices index rose 1.2% on-year in April, 0.1% slowing from a 1.3% on-year gain in the previous month. The dollar closed at 1,066.29 won on May 29, 2013, down 5.19% from 1,124.70 the same date in 2012 and slightly down 0.32% from 1,069.68 one month earlier.
Housing Construction: Korea’s housing starts in the first three months of 2013 decreased 19% to 15,895 buildings from a year earlier 19,659 buildings. The number of wood building permits and wood building starts for the first three months in 2013 decreased 14.3% to 2,298 buildings and 14.2% to 2,005 buildings, respectively, compared with the same period in 2012. In early April, the Korean government announced a package of stimulus measures, amid a protracted property slump in the country and the National Assembly, on April 30, finally passed a set of bills calling for tax breaks on housing transactions in a move expected to boost the slumping real estate market. Under one of the bills, any household with a combined annual income of 70 million Korean won (about US $63,000) or less will be completely exempt from the acquisition tax when they purchase a house worth no more than 600 million won (about US $543,000), however, this is only applicable to first time home buyers. Under the other bill, homes worth up to 600 million won or are no larger than 85 m2 will be exempt from capital gains taxes if property owners sell the property over the next five years.
SPF Shipments: Canadian SPF exports to South Korea for the first three months of 2013 significantly decreased 25.2% to 22,765 MFBM affected by overall housing market slump, treated wood issue and increased Canadian lumber prices.