Canada Wood Today | The Canada Wood Group

Korea Economy, Housing & Lumber Shipments

Tai Jeong

By Tai Jeong

Country Director, Canada Wood Korea

July 5, 2012

Economy Update

South Korea’s GDP grew a modest 2.8% on-year in the first quarter of 2012 helped by a 10.3% rise in facility investment and a 1% increase in consumption gains.

South Korea’s exports grew at a slower pace due to slower-than-expected economic growth in China and mounting Eurozone woes. Exports gained a mere 0.6% on-year for the first five months of this year. The nation’s trade surplus widened slightly in May from the previous month as exports shrank at a slower pace than imports. Exports reached to $47.2 billion in May, down 0.4% on-year, with imports also contracting 1.2% to $44.8 billion, resulting in a $2.4 billion trade surplus.

Korea’s jobless rate continued to decelerate and stood at 3.1% in May, down slightly from 3.2% a year earlier mainly due to more positions created in the service sector.

South Korea’s consumer price grew 2.5% from the previous year in May, marking a 2% growth for the third straight month. May’s consumer price inflation hit a five-year low since 2.3% in 2007.

The dollar closed at 1,109.02 won on June 25, 2012, up 2.3% from 1,084.10 the same date in 2011 and down 1.7% from 1,127.66 one month earlier.

 

Housing Construction

Korean Housing Starts Summary and Market Condition:

Korea’s housing starts in the first four months of 2012 increased 15.6% to 29,459 buildings from a year earlier 25,483 buildings owing to the continuous government extended tax benefits to real estate investors and financial support for local builders.

As a follow up to the recently announced governmental package of measures to boost the sagging real estate market, Korea is preparing to release a new set of measures aimed at breathing life back into the domestic real estate market.

 

Korean Wood Building Permits and Starts Summary:

The number of wood building permits and wood building starts for the four months in 2012 continuously increased 14.8% to 3,943 and 24.5% to 3,425 respectively compared with the same period in 2011.

Wood Building

2008

2009

2010

2011

Jan.-Apr.

Jan.-Apr.

(%)

2011 YTD

2012 YTD

Number of Permits

10,184

11,022

10,922

11,382

3,435

3,943

14.8

Number of Starts

8,191

9,503

9,558

10,159

2,752

3,425

24.5

Source: Ministry of Land, Transportation and Maritime Affairs (as a percent compared to previous year same month and period)

 

SPF Shipments

Canadian SPF exports to South Korea in the first three months of 2012 decreased 8.3% to 30,448 MFBM compared with the same period in 2011 due to local uncertainty caused by mounting Eurozone financial woes.

To make the situation worse, the tightening of treatment requirements by Korea Forest Service to rein in local poor lumber treaters has made wood importers hesitant to import SPF dimension for the use of blanks for pressure treating.

CWK is working with the Korean Wood Committee to develop a new treatment standard based on CSA O80 residential products to allow SPF treated wood for residential deck board and siding applications. In the meantime, the Korean treating industry is shifting softwood species to more easily treated species such as European Red Pine, US Hem Fir, SYP and Radiata Pine