The South Korean building engineering sector, one of the key industries in the domestic market, is feeling the backlash from the global economic crisis. According to the Italian Institute for Foreign Trade office in Seoul results from 2008 are not positive; data from the end of October shows 55,831 construction firms in South Korea, 63 less than the previous month. Of these, 58 declared bankruptcy, the highest number since December 2004 and a sign of how the economic crisis has had repercussions on the construction sector, which accounts for 18% of the GDP.
Construction firms in South Korea are suffering from the severe drop in domestic contracts (down 80% compared to 2007) and the increase in unsold new residential properties, a result of the property market boom before the crisis that led to a real estate bubble.

To rescue the sector, fundamental to the country’s economy, the government has promised stimulus funding amounting to more than nine billion USD, most of which will be used to buy property from construction companies most in distress as well as land and unsold housing.
Foreign contracts in 2008 reached a level of 300 million USD three years after totalling 200 million in February 2006. There were 642 foreign contracts for industrial plants in 77 countries with a total value 47.6 billion USD, a 19.7% increase compared to 2007 and half of which were from the Middle East, making for a rise of 63% compared to 2007. However, the results do not meet the 50 billion USD objective set by the Ministry of Economy and expectations for 2009 are not good either. An 8% drop in job orders is predicted but recovery is forecast to start in 2010. Most orders are for marine platforms.