Korean Economy, Construction & Lumber Shipments
The depreciation of the Chinese yuan ignited concerns across the world that the Chinese economy is worse than expected. South Korea, as an export depending country, will likely suffer a direct or indirect impact from the current Chinese economic difficulty.South Korea’s exports in the first seven months of 2015 contracted 4.9% to $315.2 billion, while imports nosedived 15.5% to $261.2 billion compared with those for the same period in 2014.
As a result, the country’s cumulative trade surplus in the first seven months of 2015 stood at $54 billion, much larger than the $22.2 billion in the black posted for the same period in 2014.
South Korea’s private consumption has remained in the doldrums since the MERS outbreak in late May. As part of efforts to stimulate anemic consumer spending that is weighing down economic growth, South Korean government unveiled measures to cut consumption taxes on some goods temporarily, predicting that the consumption-boosting measures will raise the country’s economic growth rate by 0.025 percentage point. South Korea is trying to achieve at least 3% GDP growth in 2015, although many independent think tanks predict mid-to-high 2% GDP growth is more realistic for 2015.
South Korea’s consumer prices grew less than 1% for the 8th straight month in July. Jobless rate inched down to 3.7% in July.
The real value of the South Korean won against key foreign currencies dropped 2.2% on-month in July, providing exporters with breathing room to boost their overseas sales that had taken a hit from a strong won. The exchange rate for Canadian Dollar averaged at 891.31 won in July, 2015, down 6.27 % from 950.94 in July, 2014 and down by 0.97% from 900.07 in one month earlier.
South Korea’s housing starts in year-to-date June of 2015 increased 18.7% to 54,585 buildings from a year earlier 45,994 buildings owing to the continuous government measures to revamp the country’s property market and the increased demand from end-users on new housings. Housing permits in the same period also increased 15.9% to 58,254 buildings from a year earlier 50,283 buildings.
The number of wood building permits and wood building starts in year-to-date June of 2015 continuously increased 15.5% to 7,428 buildings and 17.6% to 6,613 buildings respectively compared with those in 2014.
South Korea’s home transactions surged to a new monthly high in July pointing to a strong recovery in the real estate market. In the first seven months of 2015, home transactions spiked 31% on-year to 721,471. By type, apartment transactions surged 40.3 percent on-year to 74,112, while transactions involving row houses spiked 56.7 percent to 19,900. Transactions of detached houses also surged 41.7 percent to 16,663.
BC softwood lumber export volume to South Korea for the first six months in 2015 dramatically increased 17.1% to 165,136 cubic meters as compared to 141,014 cubic meters for the same period in 2014. As a consequence of increased export volume, export value in year-to-date June also increased 17.4% to CAD$43.859 million as compared to CAD$37.363 million in the same period in 2014.
BC Softwood Lumber Exports to South Korea 2013/2015 Cumulative