Market Research Report
Construction in Turkey - Key Trends and Opportunities to 2024
|Published by||GlobalData||Product code||240899|
|Published||Content info||47 Pages
Delivery time: 1-2 business days
|Construction in Turkey - Key Trends and Opportunities to 2024|
|Published: January 22, 2020||Content info: 47 Pages||
The slump in construction activity in Turkey deepened in 2019, with the industry contracting by 8.0% in real terms, following a decline of 2.1% in 2018. The country's economic woes have severely impacted construction activity; the depreciation in the lira and high interest rates have pushed up construction costs and the cost of borrowing, such that the viability of projects has been eroded and firms are reportedly bringing projects to a halt. Increasing numbers of construction companies have also collapsed or have sought bankruptcy protection.
There are still factors that could prop up the industry towards the latter part of the forecast period, notably the government's focus on developing transport, residential and energy infrastructure. The industry is expected to recover in 2020, with growth continuing through the latter part of forecast period (2020-2024). The industry's output value is expected to grow at an annual average growth rate of 5% during the period of 2020-2024, with new investment in manufacturing plants and the government's focus on developing the country's infrastructure projects. In July 2019, the parliament passed its 11th five-year development plan 2019-2023, under which the government aims to turn country into a US$1.1 trillion economy, as well as generate US$226.6 billion of income from exports by 2023. To achieve this target, the government aims to deploy high speed internet cables across the country to implement additive manufacturing, robotics, the internet of things, artificial intelligence and augmented reality technologies in the manufacturing sector. Through this, the government aims to attract foreign manufacturing companies and increase manufacturing production.
The government's focus to develop the energy sector - in particular renewable energy - is also expected to drive the industry's growth over the forecast period. In September 2019, the government issued a license for the construction of a nuclear power plant to Russia's Rosatom. In addition, the Emba Electricity Production company, a joint-venture Chinese and Turkish company, is investing TRY10.7 billion (US$1.7 billion) to build the Emba Hunutlu power plant by 2021.
However, the ongoing currency crisis in the country, coupled with high unemployment, are expected to have a negative impact on Turkey's economy, which could have an adverse impact on construction spending. Disputes between the US and Turkey are also expected to hold back the country's economic growth over the forecast period. In October 2019, the US imposed a 50% trade tariff on Turkey's steel, and also halted trade negotiation talks with the country.
The industry's output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 4.99% over the forecast period, according to GlobalData.
GlobalData's Construction in Turkey - Key Trends and Opportunities to 2024 report provides detailed market analysis, information and insights into the Turkish construction industry, including -