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Construction industry faces persistent liquidity challenges

[THE INVESTOR] Despite increasing sales and operating profit at the construction industry, companies appeared to be suffering from insufficient liquidity in the first quarter of the year, according to industry data.

The current ratio -- a measure of company‘s ability to pay short-term and long-term obligations of 120 builders fell 10.7 percent compared to the same period in 2015 to 110.1 percent. at the same time, their debt ratio decreased from 168.6 percent to 162.9 percent.

In total, the local construction industry posted 32.2 trillion won (US$27.2 billion) of quarterly sales, which reflected a 20.1 percent increase from 2015.

Industry watchers said the industry, while it appears to have achieved partial recovery, is still vulnerable in terms of financing.

By Ahn Sung-mi (