Issue Focus

This report comprehensively analyzes the external financing market for the construction industry and provides data that can help domestic construction companies establish efficient financing strategies. Financing conditions for construction companies in the stock market are challenging. The construction industry stock index exhibits higher volatility and lower rates of return than other industries, and it has recently experienced a significant decline compared to the market index. Financing in the bond market continues to be challenging due to continuous interest rate increases and the credit crunch in the bond market at the end of 2022. In particular, bond interest rates and spreads soared due to the problem of real estate PF insolvency in the second half of 2022. Financing conditions in the indirect financial market, where construction companies primarily secure financing, are unfavorable as financing costs remain high due to elevated interest rates. The high financing costs are expected to endure due to high-interest rates, and concerns about real estate PF insolvency still linger. Construction companies must vigilantly monitor trends in the external financing market and explore stable and efficient financing methods.