Research Reports

The construction industry is an important foundation industry that goes beyond simple construction, supporting the national economy, forming the basic environment of society, and determining the quality of life of the people. However, the construction industry is now at a critical turning point where it must design values ​​and a sustainable future suitable for the new era amidst unprecedented crises and changes.

In response, the Korea Construction Industry Research Institute has published 『Reinventing the Construction Industry: A Rebirth Strategy』. The report contains strategies and systems for breaking away from the existing growth model and transforming into a value-centered industry, securing sustainability, and reviving the construction industry within a new paradigm.

The challenges and crises facing the construction industry today are complex. In addition to structural problems such as the low-growth trend, shrinking real estate market, stagnant technological innovation, labor shortage, and declining productivity, huge trends such as digital transformation, eco-friendly paradigm, ESG management, and population structure changes are reorganizing the entire industry. It is an era where sustainable growth can no longer be guaranteed with existing methods alone.

The direction that the construction industry must take in these changes is very clear. Beyond simple survival, it is about transforming into a future industry of the nation with social value and sustainability as its core. The strategy for the rebirth of the construction industry is based on the vision of a “national industry that builds the future of the people,” and is promoted with a focus on four major goals (Responsible: fulfilling responsibilities, Revolutionary: pursuing innovation, Reliable: trustworthy, Resilient: leaping forward) and three major principles (fairness and coexistence, convergence and expansion, autonomy and innovation).

First, reestablishing the value of the industry – The construction industry must transform from a simple construction industry to an industry that puts people first. In addition to technology and capital, the value of people must become the center of the industry. To this end, it is essential to foster skilled workers, improve the work environment, and establish a fair and safe industrial culture.

Second, a major transformation of the production system – The existing disconnected construction process must be improved, and a production system that strengthens connectivity and cooperation must be established. While improving excessive regulations and unfair elements, an environment in which various entities can collaborate smoothly must be created. Through this, we must form an industrial structure that is integrated with cutting-edge technology to increase productivity and efficiency.

Third, innovation in the construction market and products – We must transform the paradigm of construction products and services by shifting to a consumer-centered mindset. We must actively introduce sustainable construction technologies and strengthen global competitiveness by incorporating digital technologies and smart construction systems. Through this, the construction industry must establish itself as an industry that realizes a smarter and more sustainable society.

The rebirth of the construction industry is not a simple innovation, but a process of a great transformation that fundamentally redesigns the industry based on new principles and philosophies. In order to realize this, we must establish a governance in which the government and the private sector cooperate, and research and policy implementation must be supported.

The Korea Construction Industry Research Institute will do its best to ensure that the construction industry can establish itself as a value-centered sustainable industry in this journey of change. We will actively move forward to help the construction industry leap forward as a core industry that creates the future by cooperating with various stakeholders such as the central government, local governments, industry, and academia.

We hope that the 『Strategy for the Rebirth and Innovation of the Construction Industry』 will be able to overcome the current crisis and provide meaningful insights and practical solutions to all those who are concerned about the future of the construction industry.

News Stay and Public-supported private rental housing initiatives have laid the groundwork for corporate private rental housing supply. However, these programs faced significant challenges during implementation. Despite being long-term projects, they experienced frequent changes in policy models, funding structures, financing terms, and tax regulations. These rapid shifts increased market participation risks and eroded trust among stakeholders.Both programs set ambitious annual supply targets of over 30,000 units. However, actual performance fell short, with less than 10,000 units delivered per year. This failure to meet expectations hindered business activation.

 The government's new focus on long-term private rental housing (20+ years) should prioritize creating a successful model over meeting quantity targets. This shift requires developing and operating a viable business model. While public obligations and incentives vary, the 20-year model is consistently longer than previous programs.Investment fund liquidity is crucial. Recent policy changes allowing loan refinancing and relaxing standards for collateralized loans and REIT stock transfers are beneficial. Further exploration of conditions to enhance investment fund liquidity and reduce long-term investment burdens is necessary.Securing market trust through stable exits from initial News Stay projects is critical for promoting future private rental policies. However, proposed retroactive regulations on preferential sales and pre-sale conversion prices threaten profitability and violate principles against retroactive legislation.

 Such regulatory friction could undermine market trust and impede new ventures.Guaranteed exits based on initial agreements are essential for maintaining investor confidence. To balance investor rights and rental housing stock maintenance, alternative exit strategies like extended sale periods or conversion to listed REITs should be considered.The unfair allocation of National Housing and Urban Fund resources without corresponding profit responsibility should be addressed and removed from new public offering regulations. Additional support measures, including fee reductions, shorter business periods, and clarification of contract renewal rights upon liquidation, should be implemented.Redevelopment-linked business types should be selectively promoted, while expanding incentives for private sector proposals requiring private housing land acquisition. Multi-Property REITs encompassing diverse property types and locations should be encouraged to balance rental and capital gains.

 This necessitates an increase in small urban housing units generating monthly rental income.To stimulate business revitalization and improve profitability, acquisition taxes and comprehensive real estate taxes on rental housing should be normalized. Finally, the introduction of financing methods utilizing both REITs and Commercial Mortgage-Backed Securities is recommended.

This research paper is to develop guidelines for ESG(Environment, Social, Governance) performance indicators of the construction industry. Through this, we intend to effectively respond to the recent spread of ESG management and spread sustainable management of construction organizations.Recently, domestically and internationally, interest in ESG has been growing along with the expansion of discussions on major international issues such as the sustainable growth of countries, industries, and companies, environment, and human rights.The environmental, social, and governance elements of ESG are directly or indirectly connected not only to the construction market but also to all areas of the construction industry, including construction production activities. The impact of ESG on the construction industry is expected to be greater than that of other industries.Therefore, the construction industry needs to understand the recent trends in ESG and continue to pay attention to the background and action plans of ESG management.This study was conducted to provide guidelines for revitalizing ESG management in the construction industry by analyzing major issues and response trends of ESG management, the institutional environment of the construction industry, and demand for the industry.As a result, a total of 17 items and 72 performance indicators were developed, including 21 performance indicators in 6 items in the environmental sector, 30 performance indicators in 7 items in the social sector, and 21 performance indicators in 4 items in the governance sector.This construction industry ESG performance indicator is expected to help construction organizations establish ESG strategies and draw action tasks, and can be used as basic data for a disclosure system that considers the characteristics of the construction industry when ESG disclosure becomes mandatory in the future.

● The Korea Construction Industry Research Institute selected ① a sustainable supply system, ② a system that responds to changes in the market structure, and ③ stabilization of construction and real estate finance as policy issues to overcome the construction and real estate market crisis in 2024, and proposed policy tasks for each issue. - Establishment of a Sustainable Supply System to Stabilize the Real Estate Market: Revitalizing the  Maintenance Project + Improving Regulations on the Supply of  - Preemptive System Reorganization in Response to Structural Changes in the Housing Market: Responding to Future Demand in  + Housing Stabilization for Ordinary People in  - Establishment of policies to stabilize the finance of construction real estate:  PF crisis soft landing + fundamental improvement of  PF structure ● Policy task areas were set for each of the three major issues, and a total of 24 tasks were derived. - 1) Establishment of a sustainable supply system to stabilize the real estate market: Propose nine tasks in two areas: revitalizing maintenance projects to expand the supply of downtown  and improving supply regulations to create  - 2) Preemptive system reform in response to changes in the housing market structure: Propose eight tasks in two areas: responding to the future of  and boosting demand for market normalization, and reorganizing the system to stabilize housing for the common people in  - 3) Formulating policies to normalize construction real estate finance: Propose seven tasks in two areas: inducing a soft landing of the  real estate PF crisis and improving the  real estate PF structure ● (Preparation of a sustainable supply system to stabilize the real estate market) The contents of each sector's tasks are as follows. - (Activation of maintenance projects to expand the supply of downtown ) First, to promote rapid and smooth urban maintenance projects, second, to revitalize public participatory maintenance projects to promote maintenance projects in areas lacking business feasibility, third, to reorganize the floor area ratio system of maintenance projects to improve old high-density residential areas, fourth, to introduce financial structures and reorganize business structures to raise project costs and contributions, and fifth, to reorganize related systems related to shopping malls to enhance the speed and equity of reconstruction projects - (Improvement of supply regulations to create  volume) First, expansion and early promotion of the third new city in preparation for shortage of housing supply, second, easing supply reduction due to soaring housing construction costs, third, preparing realistic regulations on noise between floors of apartments, and fourth, improving the school facility supply system reflecting the future educational environment ● (Preemptive system reform in response to changes in the housing market structure) The contents of each sector's tasks are as follows. - (Estimulating demand for future response to  and market normalization) First, improving the system for flexible non-apartment market operation, second, reforming the tax system to boost demand and resolve unsold housing, third, revitalizing senior housing reflecting the future demographic structure, and fourth, reorganizing the subscription system to provide opportunities for fair housing - (Reorganizing the system to stabilize housing for ordinary people in ) First, establishing infrastructure in the rental market to eradicate lease fraud, second, rationalizing lease loans to stabilize rental housing, third, improving the public-supported private rental housing system to revitalize corporate rental housing, and fourth, normalizing the private rental business system to stabilize the rental market ● (Preparation of policies to normalize the finance of construction real estate) The contents of each sector's tasks are as follows. - (Inducing a soft landing on the real estate PF crisis in ) First, promoting the resolution of unsold apartments, second, reducing the amount of losses of private businesses (construction companies and financial institutions) by purchasing insolvent workplaces, third, improving the conditions for promoting joint PF projects between the public and private sectors, and fourth, establishing and operating a cross-ministerial cooperation system to improve PF business feasibility - (Improving the structure of real estate PF in ) First, improve the risk concentration structure of construction companies, second, prepare a liquidity supply device for the construction industry to stabilize the development project, and third, present a comprehensive management system for real estate PF projects ● Summarizing the system of three major issues, six sectors, and 24 tasks and the details of each task, as shown in the following Table.

This research paper analyzes the EU Commission’s 'Construction Industry Policy for Green and Digital Transformation and Enhancing Resilience' as communicated in the Commission Staff Working Document, “Scenarios for a transition pathway for a resilient, greener and more digital construction ecosystem”. Regarding industrial policy, the EU Commission only has the authority to support or supplement member states’ initiatives, so industrial strategies related to the construction industry ecosystem are secondary to environmental and digital transformation policies and in which the EU can play a leading role. Taking this fact into account, we will look at the process leading to the formation of the construction industry policy, from the European Green Deal to industrial and trade policies resulting from it, and their contents. The European Green Deal is a policy package and growth strategy to achieve climate neutrality by 2050. The Green Deal is announced in the form of a communication, as soon as Commission President Ursula von der Leyen took office in December 2019. In an effort to concretize the Green Deal, the European Commission published 'A New Industrial Strategy for Europe', also in the form of a communication in March 2020, which aims at revitalizing global competitiveness and boosting digital and green transformations of EU industries. However, ten days later, the COVID-19 pandemic occurred, and not only the EU's new industrial but also new trade policies could not help but reflect the experience of the COVID-19 pandemic. Effectively, declared in February 2021, the New Strategy for EU Trade Policy advocates open strategic autonomy. And issued in May 2021, ‘Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe's recovery’ emphasizes the resilience of the industrial ecosystem that embodies the 'open strategic autonomy' expressed in the new trade policy at the industrial level. The update of the new industrial strategy encompasses 14 industrial ecosystems, including the construction industry ecosystem, as targets of industrial strategy. As a sequel to the updated New Industrial Policy, the European Commission publicized the Commission Staff Working Document, “Scenarios for a transition pathway for a resilient, greener and more digital construction ecosystem”. Established under the framework of the revised new industrial policy, EU’s Construction Industry Policy for Green and Digital Transformation and Enhancing Resilience was formed in a bottom-up manner. To identify and co-design pathways for the digital and green transformation of the construction industry ecosystem, the European Commission proposed a collaborative process with various stakeholders including member states’ governments, industrial representatives, social partners, and academia and the proposition was realized in the form of the High Level Construction Forum (HLCF) and thematic cluster group meetings on digital, green and resilience. Furthermore, EU's construction industry policy was introduced from the perspective of the construction industry ecosystem, which consists of the construction industry in a narrow sense related to on-site construction, the manufacturing industry that produces construction products and major materials, and the sector responsible for maintenance, management, and repair of the built environment. EU’s construction industry policy consists of parts focusing respectively enhancing resilience and competitiveness, supporting green transition, supporting digitalization, supporting transition using government procurement, financing for transition support, and research & innovation policy to support transition. The green and digital transformation key performance indicators of the construction industry ecosystem can be divided into general indicators, green transformation indicators of construction activities, green transformation indicators of existing houses, digitalization indicators of the construction sector, and other indicators. The Korean government also aligned with the Paris Agreement (2015) and recognized the seriousness of the climate crisis, announcing the Green New Deal policy in July 2020 and declaring in October of the same year the vision to achieve carbon neutrality by 2050. In addition, the “Framework Act on Carbon Neutrality and Green Growth to Respond to the Climate Crisis,” was enacted in 2022 to provide integrated considerations for the promotion of green growth and the necessary legal basis for it, the reduction of greenhouse gas emissions to transition to a carbon-neutral society, the adaption to the climate crisis, the minimization of job loss or damage to the local economy or vulnerable groups that may occur during the transition to a carbon-neutral society, the harmonization of the economy and the environment. In accordance with this framework act, the '2050 Carbon Neutral Green Growth Committee' deliberated in April 2023 on the 1st National Carbon Neutral Green Growth Basic Plan, which is the highest statutory plan containing the current government's will and policy direction for carbon neutral green growth. The bottom-up approach, discerned in the EU's construction industry policy establishment process is equally recognized in the establishment of Korea's first national carbon neutral green growth basic plan. In addition, the approach was also set to be applied to the inspection system of the basic plan’s implementation, by means of which future generations are supposed to participate in the implementation of the basic plan. Further, a comprehensive evaluation system of building energy performance will be applied to improve building energy efficiency. Furthermore, a follow-up management plan for zero energy buildings was also specified in the existing zero energy building certification system. Through the first national carbon neutral green growth basic plan, it was decided to establish a legal and institutional foundation to revitalize the timber construction field which uses wood as a building material that can absorb and store greenhouse gases. In contrast to the EU's policies that target at improving energy efficiency and reducing greenhouse gas emissions in existing buildings, manifested in the Renovation Wave, the Korean policies above-mentioned focus on new buildings. This difference is related to a situation where EU policies, due to the limitations of the EU Commission's position on industrial policy, are forced to reflect the perspective of environmental or energy policy goals rather than the perspective of the construction industry. In the same context, unlike the EU, the Korean government, which does not have institutional restrictions related to industrial policy, is able to establish and implement carbon neutrality and green growth policies from an industrial perspective, which present the Carbon Capture, Utilization, Storage (CCUS) industry as a means of reduction of greenhouse gas emissions. The EU's construction industry policy aimed at green and digital transformation and resilience need to be monitored with continued interest. This is because the emissions trading system, the carbon border adjustment mechanism, and the EU's trade and industry strategy of pursuing open strategic autonomy can reorganize the global supply chain and have a significant impact both on the global trade environment and on Korea's construction industry ecosystem.

This study delves into the crucial area of corporate responses to climate change, with a specific focus on Korean construction companies. The primary goal is to delineate successful response strategies and tasks that enable these companies to effectively tackle the challenges posed by climate change. The research commences with an evaluation of the existing responses of Korean construction firms to climate change, followed by an extensive examination of global standards and guidelines pertinent to corporate climate change responses. Furthermore, the study scrutinizes response strategies and noteworthy initiatives implemented by leading advanced companies. Drawing implications from the analysis, the study formulates essential response strategies and tasks for Korean construction companies to navigate climate change successfully. These identified activities are structured in a five-step model. The initial step involves establishing a carbon emissions reduction roadmap, emphasizing the need for clear timelines, intermediate reduction goals, and target scopes. Detailed guidelines for achieving this objective are presented. The second step underscores the necessity of organizational design tailored for climate change responses. This includes establishing a climate change response committee, a dedicated department at the head office, and placing personnel at project sites. Clear roles, responsibilities, and work cooperation systems are deemed critical for analyzing risks, formulating response strategies, and overseeing implementation. The third step addresses the establishment and implementation of carbon-neutral strategies and major activity plans. Strategies encompass both carbon emission reduction and offsetting, with a focus on distinguishing between different carbon emission scopes. The study outlines key strategies and activities for each sector. The fourth step emphasizes the importance of measuring and providing feedback on performance related to climate change. A proposed performance measurement system includes key performance indicators (KPIs) for major strategies and activities. It is recommended to link KPIs with organizational evaluations and executive compensation systems. The efficient utilization of an information system for data calculation and aggregation is also underscored. The fifth and final step pertains to the verification and disclosure of carbon emission reduction goals and performance. Standard methodologies, including the Greenhouse Gas Protocol, are highlighted for calculating carbon emissions. External verification from a professional organization is suggested for performance indicators, and adherence to recognized guidelines, such as TCFD recommendations and SBTi methodology, is encouraged for the disclosure of climate change response activities and financial impacts.

In this study, we aim to analyze the causes of fatal accidents in the construction industry over the past three years from various perspectives, extracting distinctive characteristics among incidents and emphasizing the need for corresponding measures. Firstly, we analyze the characteristics of fatal accidents based on primary information factors such as project types, construction scales, and construction types. Subsequently, through multidimensional analysis considering primary information factors simultaneously, such as project types and construction scales, project types and construction types, and construction scales and construction types, we derive the characteristics of fatal accidents in the construction industry. This study underscores the importance of developing measures tailored to these characteristics. The fatalities resulting from accidents in the construction industry are predominantly concentrated in private sector projects, with a high proportion occurring in small-scale construction sites with a budget of less than 5 billion. Furthermore, when categorized by construction type, public civil engineering and private building projects collectively account for the majority of the total fatalities, particularly in construction projects with budgets below 5 billion and above 300 billion. In summary of the analysis results, a significant number of fatalities in construction accidents over the past three years have occurred in construction sites with budgets of less than 5 billion in the private sector. This indicates the need for enhanced measures for accident prevention, particularly focusing on small-scale sites in private sector construction. Comprehensive analysis of multidimensional results based on accident types and objects reveals that fatalities resulting from "falling" accidents and those caused by "visible structures" are most prominently observed in small-scale private construction projects (budgets less than 5 billion) in the building sector. While acknowledging the limitation of analyzing only the data on fatalities in the construction industry over the past three years, multidimensional analysis of various accident characteristics and factors such as project scale enables the following policy recommendations. To prevent or reduce fatalities in construction site accidents, tailored measures are required for small-scale sites with budgets less than 5 billion. Support, such as providing worker safety education at the public level, is necessary. Considering the high proportion of fatalities associated with visible structures and construction machinery, there is a need to specify and strengthen safety inspection measures related to these objects. For example, enhancing inspections for visible structures during initial safety checks or conducting regular inspections during construction activities is necessary. The age group of fatalities being 50 years and above signals aging in the workforce on construction sites. Alongside reinforcing safety education for individual workers, support policies should be developed to encourage the influx of younger workers. Given that the major cause of fatalities is unsafe behavior by workers, strengthening management supervision including safety education for workers, should take precedence. Additionally exploring and utilizing various smart safety technologies capable of monitoring and providing signals for workers' inattentive behavior should be considered. Enhancement of safety management and education in the early stages of construction is required and a system for calculating and implementing appropriate construction schedules should be established. Particularly measures for applying appropriate schedules to small-scale private construction projects need to be devised. The fact that a majority of fatalities occur in segments where the completion rate is less than 10% or in phases close to project completion exceeding 80%, indicates deficiencies in the completeness of safety management systems in the early stages and pressures nearing project completion as factors contributing to accidents. Finally for CSI data to be effectively utilized as a resource for reducing future construction accidents detailed data on incidents must be input without any missing information and additional data collection is also required.

Materials used in the domestic construction industry account for approximately 5.8% of GDP and have a large impact on the overall economy, but sufficient research has not been conducted so far. The purpose of this study is to understand the major construction material industries and analyze how much is actually input into the construction industry in South Korea. The first purpose of the study is to examine the demand for construction materials reflecting the construction economy and to estimate the demand for major construction materials based on the quantity. ․Second is to understand the basic production process of major construction materials and examine the raw material input structure. This study consists of a total of 5 chapters, and each chapter is summarized as follows. ․Chapter 1 explains the background and purpose of the study as an introduction, explains the differences along with consideration of past studies, and discusses the overall composition of the study. The cost structure of the construction industry was analyzed. In order to examine the trend of construction material cost changes in terms of construction cost, construction industry management analysis and construction cost data were used, and at the same time, the input cost of major construction materials by type of construction material market was analyzed from the industrial point of view through the inter-industry table. ․Chapter 3 sets the main construction materials as cement, ready-mixed concrete, aggregate, rebar. In order to examine the production volume and price changes for each material, and to examine the characteristics of the industry, we examine the production method, raw material, and supply method respectively. ․In Chapter 4, basic unit analysis of major construction materials was performed. The unit input structure was reviewed, and the ready-made amount of the construction industry was formed in the form most similar to the process presented in the industrial-related table constituting the construction investment amount, and the input amount was set. do the analysis.

It is necessary to make a labor supply plan that reflects the characteristics of the construction industry which produces on orders and the labor market situation as aging issue of construction workers in Korea. Based on the database of the Construction Workers Mutual Aid Association (CWMA) in Korea, the total number of foreign workers is estimated to be about 194 thousand foreigners account for 12.4% of all construction workers. By occupation, the proportion of foreigners is continuously increasing in construction industry of Korea. And the entry of young foreign construction workers is increasing relative to that of Koreans. The demand for construction workers in the period 2022-2024 estimates 1.552 million. The supply for the number of Koreans estimates 1.382 million, and the number of foreigners estimates about 190 thousand. Thus it is necessary to reflect foreign workers who is legally employed of the construction industry complementarily in the labor supply system due to lack of market (excess labor demand). The policy authorities need to prioritize strategic priorities in order to continuously foster Korean construction workers. Furthermore, it is necessary to actively cooperate with the public- and private agencies in preparation of the financial resources for establishing the education and training system of construction industry in Korea. The deregulation of foreign construction worker and industrial policy support for education and training can ultimately contribute to improving the quality competitiveness of the domestic construction industry and promoting the sustainable development of the construction industry.

In this study, the environmental change of the construction industry in the carbon-neutral era was analyzed, and furthermore, strategic directions and key carbon reduction measures for the successful achievement of carbon neutrality in the construction industry were derived. The specific objectives of this study are as follows. First, it aims to identify opportunities and threats that carbon neutrality will have on construction companies in the future. Second, we intend to derive strategic directions and key carbon emission reduction measures for the success of carbon neutrality in the construction industry in the future carbon-neutral era. Third, to clarify the role and cooperative structure of major industrial actors (construction companies, material production companies, government, etc.) for successful carbon emission reduction in the construction industry. The strategic direction for the reduction of carbon emissions in the construction industry is, first, to enhance the carbon emission reduction effect by reducing carbon emission in the part with a high proportion of carbon emission among activities in the life cycle stage of the construction industry. Secondly, among the measures to reduce carbon emissions, it is to focus on reduction measures that are specific to the construction industry. As a result of evaluating the carbon emission reduction effect based on the proportion of carbon emission in each stage of the life cycle, the reduction of embodied carbon related to the production of construction materials in the construction stage and the reduction of carbon in operation of buildings in the operation stage were evaluated as important parts. As a result of the evaluation of specialization at the level of the construction industry, additional measures to utilize low-carbon construction techniques were evaluated as important. In the end, it was determined that the core carbon emission reduction measures of the construction industry were the material production-related embodied carbon reduction measures, the use of carbon emission reduction construction techniques, and the building operational carbon reduction measures.