PUBLISHER: GlobalData | PRODUCT CODE: 1086918
PUBLISHER: GlobalData | PRODUCT CODE: 1086918
The Turkish construction industry is expected to decline by 8.1% in 2022, following a weak first half of the year, in which output contracted by 9.8% compared to the first half of 2021. The decline has been driven by the impact of the ongoing currency crisis and soaring inflation on the Turkish economy, which is highly sensitive to changes in the value of the lira due to Turkey's large current account deficit. The lira's value has fallen by 37.6% against the US dollar in the first seven months of this year. Since March 2022, the impact of the war in Ukraine on energy and commodity prices has put further pressure on import costs. According to the Turkish Statistical Institute (Turkstat), total construction costs rose by 106.4% year on year (YoY) in the second quarter of 2022, driven primarily by rising materials costs, which increased by 131.6%. This will weigh heavily on new investment, as well as on the progress of ongoing construction projects over the remaining part of 2022 and into 2023. According to Turkstat, the total floor area of building permits issued decreased by 14.8% YoY in the first half of 2022, reflecting weaker confidence in the industry due to headwinds.
The industry's output in 2022 will be partially buoyed by public investments in transport, mining, electricity, and affordable housing projects, as well as strong demand for housing due to a government-backed scheme to keep mortgage rates low for first-time buyers. However, this is not expected to fully offset the impact of rising construction costs on housing demand, and the residential construction sector is expected to remain weak compared to historical levels in 2022 and 2023. Assuming greater macroeconomic stability in 2024, the industry is expected to register an annual average growth rate of 4.9% between 2024 and 2026, supported by investment in transportation and energy projects, along with the resumption of stalled projects. In May 2022, President Recep Tayyip Erdogan allocated TYR20 billion ($1.2 billion) to the construction industry to restart projects that have been put on hold. Furthermore, in April 2022, the President unveiled the Transportation and Logistics Master Plan - Transportation 2053 Vision; launching an investment plan of TRY2 trillion ($198 billion) in transport and rail freight, with an aim to be a logistics superpower by 2053
The report provides detailed market analysis, information and insights into Turkey's construction industry, including -
This report provides a comprehensive analysis of the construction industry in Turkey. It provides -