Prime Minster Hwang Kyo-ahn, center, Kang Ho-in, Minister of Land, Infrastructure & Transportation and Chairman Choi Sam-kyu, left, of the Construction Association of Korea applaud during the New Year Event for the construction industry held at Crystal Ballroom of Lotte Hotel in downtown Seoul on Jan. 7.

Chairman Choi Sam-kyu of the Construction Association of Korea (CAK) said in his New Year’s statement that 2016 should be the year in which the construction industry and the Korean economy take powerful strides for growth to overcome tough challenges at home and abroad.

“Looking back at the construction industry’s achievements last year, we can see that the industry had been a strong backbone for the national economy,” he said. The industry was able to achieve the biggest growth rate since 2009, providing support to the people working for the industry, business firms engaged in moving houses, and material and equipment firms to provide vitality to the economy, spearheading economic growth, the chairman recalled.

In the half-century since Korean construction firms first cracked the construction market overseas, construction projects outside Korea exceeded an aggregate $700 billion last year. 

Choi said that demonstrates to the entire world Korean firms’ capacity for large and small construction projects, and Korean know-how in broad areas of construction.

The global economy doesn’t look bright this year, he noted. The domestic housing market appeared to be on the recovery last year, but its growth is likely to be dashed this year by rising U.S. interest rates and tightened financial regulations at home. Those challenges are compounded with a reduction in Korea’s government budget for social overhead capital projects this year, Choi projected.

In addition, overseas construction projects, mainly in the Middle East, appear to be falling due to low oil prices, which will hurt construction firms operating overseas.

“What we need is wisdom to overcome the various difficult challenges facing us this year, with reform in various sectors of the construction industry, and to take care of those; those of us in the construction industry should change our structures first,” the chairman advised.

Choi called for a ceasefire in the fierce competition among domestic construction firms for local projects, advising them to develop their own construction technologies and capacity to undertake various construction projects to be more cost competitive. 

Domestic construction companies should also sharpen their abilities to control risks with detailed market analyses and estimates. They should also be able to correctly analyze the profitability for projects and tighten their operations to save costs, the chairman said.

The overseas construction firms should develop high value-added projects and diversify their construction know-how and explore the construction markets in the regions outside the Middle East. 

The construction firms should be faithful to “ethical management” and diversify their social contributions for society to win public respect, the chairman urged.

Chairman Choi advised that they should also reform industrial systems that are different from those overseas in order to help their operations overseas.

A slew of key leaders in the construction industry and Prime Minister Hwang Kyo-ahn, exchange greetings at the New Year Event held at Lotte Hotel in Seoul on Jan. 7.(Photos:CAK)