S.Korea's construction orders from overseas tumble on low crude prices

South Korea's overseas construction orders posted a double-digit decline last year on the back of low crude oil prices that led to weak demand from oil-exporting countries, a government report showed on Tuesday.

Overseas orders won by local construction firms reached 28 trillion won (25 billion U.S. dollars) in 2015, down 38.3 percent from 46 trillion won tallied in 2014, according to Statistics Korea.

It was attributed to weak demand from Middle East countries, caused by cheaper oil. Orders from the Middle East retreated from 23 trillion won in 2014 to 13 trillion won in 2015.

Domestic construction orders jumped 27.7 percent over the year to 237 trillion won in 2015. Record-low borrowing costs boosted demand for new apartments, leading to a housing boom last year.

However, the boom was expected to be short-lived as the government plans to reduce apartment offering amid the record-breaking household debts.

As the U.S. Federal Reserve is widely forecast to raise interest rates at least once within this year, Bank of Korea (BOK) would refrain from cutting its policy rate further.

The BOK lowered the benchmark interest rate by 25 basis points in June to an all-time low of 1.25 percent. Endit