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SK E&C, Daewoo E&C, POSCO E&C and other local builders suffered a sharp decline in new overseas construction orders in the first three months of the year, data showed Tuesday.

Along with their sluggish performance, their combined overseas orders in the period nearly halved from a year earlier, with industry analysts saying these are both due to declining orders from the Middle East.

According to the International Contractors Association of Korea (ICAK), its member firms won contracts worth $6.1 billion in the first quarter of the year, down 40.93 percent from the same period in 2018.

The number of contracts also declined to 141 from 179.

Of those firms, SK E&C showed the most noticeable decline, logging work worth $26 million in the first quarter, down a whopping 99 percent from $2.52 billion over the same period last year.

The SK Group unit appears to be struggling in winning overseas orders after the collapse of a dam it was building in Laos in July last year. The firm logged $2.7 billion from January to July last year, but ended up winning just $187.3 million during the remainder of 2018.

To launch a recovery, the firm announced in February that it was engaged in a 1.2 billion won project to build a crude oil storage terminal in the UAE; but this was from a contract the company signed with the Abu Dhabi National Oil Company in February of last year, according to ICAK officials.

"We don't think our overseas competitiveness has been affected by the Laos incident," an SK E&C official said. "This year's numbers seem to be deflated because of a base effect from last year and we expect we can win as many contracts as last year."

Daewoo E&C has also seen some disappointing months. It won contracts worth $63.5 million in the first quarter, down 88.1 percent from 2018.

The company has set its overseas order target at $2.8 billion for this year, up 74.3 percent from last year, but analysts said winning a contract in a Nigerian liquefied natural gas facility project will determine whether the company can meet this goal. The project's total value amounts to $4.3 billion.

POSCO E&C's overseas orders also slowed in the first quarter ― it won contracts worth $63.54 million, down 87.9 percent.

The firms' downturn is largely attributable to a decline in orders from the Middle East.

Contracts won there by Korean builders declined to $767.61 million in the first three months of the year, down 72.7 percent from $2.81 billion last year. By number of contracts, they have won 19 so far, up from 16 in 2018, but the value is far lower.

"Though there is a base effect due to last year's handsome performances, the decline in orders from the Middle East has largely affected builders' overall overseas performance," an ICAK official said. "However, it is too early to make a judgment because a number of massive projects in the region are expected to see bidding results announced in the latter half of the year."

A domestic construction firm official said "winning overseas projects will be a breakthrough for builders that are suffering from the sluggish domestic housing market."

"Though we have hopes that the situation will get better later in the year, a prolonged overseas slump will deal a heavy blow to many," the official said.

• [Editor:tianyawei]