Local Construction Firms Face Record Bankruptcies in 70 Years

Dongyang Construction, a mid-sized firm that had operated in the Chungbuk region for 70 years, has shut down due to financial difficulties. As of last month this year, a total of 127 construction companies in Chungbuk have filed for bankruptcy, a 38% increase compared to the same period last year, and the largest number since 2009, when 130 companies went out of business.

While construction performance in the Chungbuk construction industry reached 4.1966 trillion won last year, it was confirmed that 33 companies, or 5% of the total, failed to secure even a single contract. With rising construction costs, dwindling profits, and a decrease in project orders, an increasing number of businesses are abandoning operations.

High interest rates, lending restrictions, and a surge in construction costs, including raw material prices, are worsening the business environment for the construction industry, raising concerns that construction sites could halt. As a recovery in private sector orders is delayed and the combination of rising construction costs and reduced project volumes continues, bankruptcies among local construction companies are on the rise.