Research Reports

Since 2020, in South Korea, the domestic economy is in a situation of increased uncertainty due to the continued re-proliferation of COVID-19. In such a situation, predicting the future construction market is an important and meaningful study. In this study, through the NBER method I made 4 composite leading indicator indexs and 4 coincident composite indexes, calssified construction type such as residential buildings, non-residential buildings, civil engineering and total construction, in order to understand domestic construction market by type. I forcasted each coincident composite indexes from July 2021 to June 2022 using ARIMA model with leading indicator data and analysed their fluctation through HP(Hodrick - Prescott) filer and calculated the recession probability through basic Markov swiching model. The implications of the one-year forecast through this study are as follows. First, although the construction market is healthy in 2021, it suggests the possibility of a transition period in the first half of next year, especially in the second quarter. Based on the data through June 2021, it suggests that the transition point of the residential construction market may proceed earlier than expected. Second, the transition point of the non-residential construction market is judged to be delayed compared to the residential construction market. It is expected that the non-residential construction market will adjust after the residential construction market is adjusted. Overall, it is analyzed that the increase in the non-residential construction market is likely to continue until the first half of 2022. Third, the recovery of the civil engineering construction industry is expected to be slower than that of the construction industry, and it is expected to be achieved in a gradual fashion. This study can be said to be an early study in examining and forecasting changes in the construction market by construction type. In order to accurately monitor economic changes, continuous follow-up studies are needed. Above all, it is necessary to study how rapidly changing financial and macro-environmental changes will affect the construction industry by construction type. In addition, research is needed to continuously update the forecast model prepared for each type of construction and improve it into an optimal model with high predictive power for each period.