Korean Economy, Housing Starts & Lumber Shipments
The South Korean economy, internally constrained by sluggish consumption and investment, is also surrounded by growing external risks. The export-driven economy, in particular, is significantly dependent on its two biggest trading partners, the US and China. The most immediate point of uncertainty for the Korean economy, especially on trade, is the US presidential election.
South Korea posted a trade surplus for 57 straight months in October as imports fell at a faster pace than exports. Exports fell 3.2% on-year to US$42 billion in October, while imports retreated 4.8% to US$35 billion resulting in a US$7 billion trade surplus, up 5.7% from a year earlier.
South Korea’s consumer prices rose 1.3% on-year in October, marking the highest monthly gain since February amid concerns over potential deflation.
South Korea’s unemployment rate rose 3.4%, the highest for the month since 2005, in October from a year earlier, with the unemployment for young people still remaining high on a lingering economic slump.
The exchange rate for Canadian Dollar averaged at 849.90 won in October, 2016, down by 3.14% from 877.42 in October, 2015 and slightly up by 0.32 % from 847.18 in one month earlier.
South Korea’s housing starts in year-to-date September of 2016 increased 3.7% to 86,726 buildings from a year earlier 83,640 buildings. Housing permits in the same period also increased 7.1% to 98,123 buildings from a year earlier 91,613 buildings, amid the South Korean government’s continuous efforts to prop up the local real estate market.
The number of wood building permits and wood building starts year-to-date September of 2016 also increased 10.6% to 12,517 buildings and 11.5% to 11,116 buildings, respectively, compared with those in 2015. The noticeable things are both total floor areas of wood building permits and starts in the same period of 2016, remarkably increased to 14.8% and 16.1% to 1,108,219 m2 and 1,000,772 m2, respectively, from a year earlier.
The number of home transactions came to 108,601 in October, compared with 106,274 in the same month last year.
By housing type, home transactions involving apartment units gained 5.8% on-year to 74,208, while those involving row houses slipped 1.6% to 20,202, with transactions involving detached houses plunging 9.1% to 14,191.
BC softwood lumber export volume to South Korea for the first nine months of 2016 increased 6% to 212,602 cubic meters as compared to 200,468 cubic meters for the same period of 2015.
Export value for the same period of 2016 also increased 2.8% to CAD$55.847 million as compared to CAD$54.342 million in 2015.
For the year-to-date to September of 2016, BC’s SPF shipment to South Korea increased 7% to 202,322 cubic meters while shipments of Hemlock, Western Red Cedar and Douglas-Fir plunged 27.8%, 55.8% and 68.6% to 4,985m3, 862m3 and 657m3, respectively.