Canada Wood Today | The Canada Wood Group

Korea Economy, Housing & Lumber Shipments

Tai Jeong

By Tai Jeong

Country Director, Canada Wood Korea

December 2, 2013

Economy

South Korea logged a trade surplus for the 21st straight month in October, 2013 thanks to relatively robust exports growth showing $4.9 billion in trade surplus resulted from 7.2% on-year increase to $50.5 billion in exports and 5.2% increase to $45.6 billion in imports from the same month last year. During the January-October period, its cumulative trade surplus rose to $35.7 billion.

Monthly household income in South Korea grew 2.9% to average 4.26 million won ($4,012) per month on-year during the third quarter amid signs the economy is recovering from a prolonged slump.

South Korea’s jobless rate inched up to 2.8% in October from a month earlier but job creation accelerated, raising hopes that labor market conditions are improving.

The average household debt in South Korea grew 6.8% over the past year to an average 58.18 million won ($55,116) in debt as of end-March, up from 54.50 million won the previous year as the Korean government unveiled measures to boost the sagging property market by offering tax benefits for home purchases. Meanwhile, financial assets of Korean households averaged 325.6 million won as of the end of March, up 0.7% from a year ago.

South Korea’s gross national income (GNI) per capita is projected to set an all-time high of $24,044 (26.4 million won) this year on the back of the U.S. dollar’s cheaper position against the won and a weaker pace in the nation’s population growth. After sliding to $17,041 in 2009 in the wake of the global financial crisis, the GNI per capita has continued to climb over the past few years – $20,562 in 2010, $22,489 in 2011 and 22,700 in 2012.

Moody’s Investors Service, the global credit appraiser, has retained its sovereign credit rating on South Korea at Aa3, its fourth-highest rating level, citing the country’s “strong” fiscal fundamentals, “moderate” debt burden, economic resilience, export competitiveness and stabilized geopolitical risks stemming from North Korea.

The exchange rate for Canadian Dollar averaged at 1,029.37 won in October, 2013, decreased 8.24 % from 1,121.78 in October, 2012 and down 1.72 % from 1,047.41 one month earlier.

Housing

Korea’s housing starts in the first nine months of 2013 decreased 6.8% to 63,221 buildings from a year earlier 67,841 buildings.

The number of wood building permits and wood building starts for the first nine months in 2013 also decreased 4.2% to 8,692 and 3.8% to 7,621 respectively compared with the same period in 2012.

Wood Building

2008

2009

2010

2011

Jan.-Sep.

Jan.-Sep.

(%)

2012 YTD

2013 YTD

Number   of Permits

10,184

11,022

10,922

11,382

9,070

8,692

-4.2

Number   of Starts

8,191

9,503

9,558

10,159

7,919

7,621

-3.8

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

Lumber Shipments

BC softwood lumber export volume to South Korea for the first nine months of 2013 significantly decreased 23% to 199,755 cubic meters as compared to 260,064 cubic meters over the same period in 2012 widely affected by overall domestic housing market slump and treated wood issue in Korea and losing price competiveness due to increased Canadian lumber prices.

However, increased Canadian lumber prices and stronger Korean won compensated the decreased export volume gap showing a mere 1.9% decrease in export value to CAD$50.022 million as compared to CAD$51.011 million over the same period in 2012.

BC Softwood Lumber Exports to South Korea

2011/2013 Cumulative

{Click graph to enlarge}

korea lumber shipments