A construction site in central Seoul. [Herald DB]
A construction site in central Seoul. [Herald DB]

Employment in the construction sector, long mired in a prolonged slump, turned positive for the first time in 24 months.

The rebound reflects a rise in temporary and daily hiring at construction sites, driven by improvements in construction orders, ground-breaking area and construction output.

However, wage growth slowed to its lowest level for the month of May since 2020. With inflation factored in, real wages fell for a second consecutive month, meaning workers' purchasing power actually declined.

According to the Ministry of Employment and Labor's June 2026 Business Labor Force Survey released Thursday, the number of workers at establishments with at least one employee stood at about 20.714 million as of the last business day of June, up 248,000, or 1.2 percent, from a year earlier.

[Provided by the Ministry of Employment and Labor]
[Provided by the Ministry of Employment and Labor]

By employment type, permanent workers rose by 76,000, while temporary and daily workers increased by 150,000 — accounting for more than 60 percent of the total gain. Other workers also grew by 22,000.

By industry, health care and social welfare services posted the largest increase, adding 124,000 workers. Finance and insurance, and public administration, defense and social security each added 33,000. Wholesale and retail trade shed 29,000 workers, while arts, sports and leisure services and the information and communications sector fell by 5,000 and 3,000, respectively.

Construction orders, ground-breakings and output all improve; sector adds jobs for first time in 24 months

Construction sector employment rose by 7,000 from a year earlier — the first increase after 23 consecutive months of decline, marking a 24-month turnaround.

The Ministry of Employment and Labor said the gain reflects a sharp rise in construction orders and ground-breaking area in recent months, along with a 3.6 percent year-on-year increase in construction output in May. However, the ministry drew a line at declaring that the construction sector had entered a full-fledged recovery.

"It is a bit too early to say construction has come back to life," said Jeong Hyang-suk, head of the ministry's labor market survey division. "But with construction orders and ground-breaking area rising, and now output also picking up, it appears that the base effect from the prolonged decline and an improving construction environment are both being reflected."

According to the Korea Construction Industry Institute, the Construction Business Survey Index for June rose 3.0 points from the previous month to 74.5. A reading below the baseline of 100 means more companies view the construction outlook pessimistically; a reading above 100 indicates optimism prevails.

Labor mobility also picked up. New hires in June totaled about 1.003 million, up 162,000, or 19.2 percent, from a year earlier, while separations reached about 1.004 million, up 128,000, or 14.7 percent. Both the hiring rate and the separation rate stood at 5.2 percent.

Among new hires, those brought on through recruitment numbered 960,000, a 20.5 percent increase. Involuntary separations totaled 631,000, up 14.8 percent, with roughly 90 percent involving temporary or daily workers. The ministry attributed the simultaneous rise in both hiring and separations to short-term contracts ending and workers being rehired in sectors such as construction and accommodation and food services.

Wages failed to keep pace with inflation. The average monthly wage per worker at establishments with at least one permanent employee came to 3.98 million won ($2,750) in May, up just 1.7 percent from a year earlier — the lowest growth rate for the month of May since the 1.2 percent recorded in May 2020.

Permanent workers earned an average of 4.25 million won, up 1.9 percent, while temporary and daily workers received 1.79 million won, up 3.2 percent. For permanent workers, regular and overtime pay both increased, but a 5.0 percent drop in special allowances weighed on overall wage growth.

Nominal wages up 1.7%, but consumer prices rise 3.1%; real wages fall more than 1% for second straight month

Real wages in May, adjusted for inflation, came to 3.32 million won, down 1.4 percent from a year earlier, as consumer price inflation of 3.1 percent outpaced nominal wage growth. Real wages fell for a second consecutive month following April's decline. Excluding fluctuations in special allowances tied to the timing of public holidays, it marked the first back-to-back monthly decline since July–August 2023.

"The triple-high environment — elevated exchange rates, oil prices and consumer prices — has dragged down real wages," Jeong said. "Wages can be seen as failing to keep up with inflation."

Average monthly working hours per worker in May came to 139.8 hours, down 7.2 hours, or 4.9 percent, from a year earlier, largely because the calendar had one fewer working day than last year. Permanent workers logged 7.9 fewer hours, while temporary and daily workers worked 2.4 hours more.

Meanwhile, job vacancies in June stood at approximately 156,000, rising from a year earlier for a third consecutive month. Vacancies first turned positive in April for the first time in 40 months and have continued to recover since. The ministry said the increase in vacancies — which represent positions employers plan to fill within a month — is a leading indicator of improving employment conditions.


fact0514@heraldcorp.com