South Korea's Marginal Construction Firms Surge to 11.3% in 2025, Up from 4.5% in 2021

According to the Korea Construction Industry Research Institute, marginal construction enterprises in South Korea—defined as companies unable to cover interest expenses with operating profits—reached 11.3% (173 firms) of 2,400 audited construction companies in 2025, up from 4.5% (62 firms) in 2021, representing a 2.8-fold increase over five years.

General contractors were most severely impacted, with marginal firms rising from 3.2% to 10.4% during the same period. Operating profit margins declined from 4.5% to 3.4%, while debt ratios increased from 129.2% to 155.3%, signaling deteriorating profitability and financial stability across the sector.