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Construction in Turkey - Key Trends and Opportunities to 2025 (Q1 2021)

April 2021 | 50 pages | ID: C372997DA236EN
GlobalData

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Construction in Turkey - Key Trends and Opportunities to 2025 (Q1 2021)

SUMMARY

The Turkish construction industry was in a weakened state prior to the COVID-19-induced slowdown, having contracted sharply in 2019, owing to the steep depreciation in the lira and high interest rates, which pushed up construction costs and the cost of borrowing. As a result, the viability of projects was eroded, and firms had to bring projects to a halt. Over the next two years, more and more construction companies collapsed or sought bankruptcy protection. Following eight consecutive quarterly contractions, industry output increased, with value-add for Q3 2020 rising by 4.7% year on year (YoY). This turned out to be a false dawn, however, as the construction industry contracted by 12.5% YoY in Q4. Rising interest rates, coupled with the imposition of lockdown measures in response to the outbreak of COVID-19, contributed to the decline in Q4 2020. The key interest rate was increased to 17% in December 2020, which was up from 8.25% in May 2020. Dragged down by the steep decline in Q4, Turkey’s construction industry contracted by 3.5% in real terms in 2020. The industry has also been affected by delays in project implementation and the reallocation of part of the government’s budget toward its fight against the pandemic.

The industry is expected to recover and grow over the forecast period, however, driven by investment in renewable energy, education and transport infrastructure. The government plans to build 2,000km of high-speed rail lines from Kars in northeast Turkey to Edirne in the westernmost part of the country. This project is being partially financed by the Chinese Government. The Turkish Government aims to increase the share of renewable energy in electricity generation to 38.8% by 2023, compared to 32.5% in 2018. Spurred on by these investments, construction output is forecast by GlobalData to grow by 3.8% in 2021, and retain growth momentum over the forecast period, with average annual growth of 5.5% during 2022-2025. However, a downside for the industry is the prospect of a currency crisis following the sacking of the central bank governor, Naci Agbal, in March 2021. With Turkey’s policy credibility likely to worsen in the coming months due to the expected cut in the key interest rate, the country is set to see major outflows of capital in the coming weeks and months. This is likely to spill over into the construction industry, with projects now set to become less profitable and financial conditions likely to tighten.

With an aim to support economic growth, on March 12, 2021 the government announced a new economic reform package, which includes plans to establish a stronger public finance structure to guard against risks. Furthermore, to reduce stock sensitivity to external shocks, the government plans to reduce the share of foreign exchange in the country's total debt stock market. The government also announced plans to cut corporate tax for low-income businesses in the country. Turkey also aims to build a digital tax office, which will operate round the clock to enable the public to carry out their transactions in the digital environment. Furthermore, the government is working on creating technological and legal infrastructure for digital currency.

This report provides detailed market analysis, information, and insights into the Turkish construction industry, including -
  • The Turkish construction industry's growth prospects by market, project type and construction activity
  • Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Turkish construction industry
  • Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
SCOPE

This report provides a comprehensive analysis of the construction industry in Turkey. It provides -
  • Historical (2016-2020) and forecast (2021-2025) valuations of the construction industry in Turkey, featuring details of key growth drivers.
  • Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
  • Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
  • Listings of major projects, in addition to details of leading contractors and consultants
REASONS TO BUY
  • Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
  • Assess market growth potential at a micro-level with over 600 time-series data forecasts.
  • Understand the latest industry and market trends.
  • Formulate and validate strategy using GlobalData's critical and actionable insight.
  • Assess business risks, including cost, regulatory and competitive pressures.
  • Evaluate competitive risk and success factors.
1 EXECUTIVE SUMMARY

2 CONSTRUCTION INDUSTRY: AT-A-GLANCE

3 CONTEXT

3.1 Economic Performance
3.2 Political Environment and Policy
3.3 Demographics
3.4 COVID-19 Status

4 CONSTRUCTION OUTLOOK

4.1 All Construction
- Outlook
- Latest news and developments
- Construction Projects Momentum Index
4.2 Commercial Construction
- Outlook
- Project analytics
- Latest news and developments
4.3 Industrial Construction
- Outlook
- Project analytics
- Latest news and developments
4.4 Infrastructure Construction
- Outlook
- Project analytics
- Latest news and developments
4.5 Energy and Utilities Construction
- Outlook
- Project analytics
- Latest news and developments
4.6 Institutional Construction
- Outlook
- Project analytics
- Latest news and developments
4.7 Residential Construction
- Outlook
- Project analytics
- Latest news and developments

5 KEY INDUSTRY PARTICIPANTS

5.1 Contractors
5.2 Consultants

6 CONSTRUCTION MARKET DATA

7 APPENDIX

7.1 What is this Report About?
7.2 Definitions
7.3 GlobalData Construction
Contact Us

LIST OF TABLES

Table 1: Construction Industry Key Data
Table 2: Turkey, Key Economic Indicators
Table 3: Turkey, Commercial Construction Output by Project Type (real % change), 2016-2025
Table 4: Turkey, Top Commercial Construction Projects by Value
Table 5: Turkey, Industrial Construction Output by Project Type (real % change), 2016-2025
Table 6: Turkey, Top Industrial Construction Projects by Value
Table 7: Turkey, Infrastructure Construction Output by Project Type (real % change), 2016-2025
Table 8: Turkey, Top Infrastructure Construction Projects by Value
Table 9: Turkey, Energy and Utilities Construction Output by Project Type (real % change), 2016-2025
Table 10: Turkey, Top Energy and Utilities Construction Projects by Value
Table 11: Turkey, Institutional Construction Output by Project Type (real % change), 2016-2025
Table 12: Turkey, Top Institutional Construction Projects by Value
Table 13: Turkey, Residential Construction Output by Project Type (real % change), 2016-2025
Table 14: Turkey, Top Residential Construction Projects by Value
Table 15: Turkey, Key Contractors
Table 16: Turkey, Key Consultants
Table 17: Turkey, Construction Output Value (Real, US$ Million)
Table 18: Turkey, Construction Output Value (Nominal, TRY Billion)
Table 19: GlobalData Construction Market Definitions

LIST OF FIGURES

Figure 1: Eastern Europe, Construction Output (real % change), 2020 and 2021
Figure 2: Turkey, Construction Projects Pipeline by Sector (US$ Billion)
Figure 3: Turkey, COVID-19 Confirmed Cases
Figure 4: Turkey, Construction Output Value (Real, US$ billion, 2017 prices and exchange rate), 2016-2025
Figure 5: Turkey, Construction Output Value, by Sector (Real, US$ Million), 2016-2025
Figure 6: Turkey, Construction Value-Add (TRY Million, 2009 Chain Linked Volume Measures)
Figure 7: Turkey, Building Activity Index and Construction Confidence Index, Seasonally Adjusted
Figure 8: Turkey, Construction Turnover Index, Seasonal and Calendar Adjusted (2015=100)
Figure 9: Turkey, Seasonally Adjusted Unemployment
Figure 10: Turkey, Construction Projects Momentum Index
Figure 11: Turkey, Commercial Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 12: Turkey, Commercial Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 13: Turkey, Services Value-Add (TRY Million, 2009 Chain Linked Volume Measures)
Figure 14: Turkey, Retail Sales Volume Index (2015=100)
Figure 15: Turkey, Total Foreign Visitors Arrivals
Figure 16: Turkey, Industrial Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 17: Turkey, Industrial Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 18: Turkey, Production Index, Seasonally and Calendar Adjusted (2015=100)
Figure 19: Turkey, Manufacturing Value-Add (TRY Million, 2009 Chain Linked Volume Measures)
Figure 20: Turkey, Total Export (US$ Million)
Figure 21: Turkey, Infrastructure Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 22: Turkey, Infrastructure Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 23: Turkey, Energy and Utilities Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 24: Turkey, Energy and Utilities Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 25: Turkey, Energy Production Index (2015=100)
Figure 26: Turkey, Institutional Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 27: Turkey, Institutional Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 28: Turkey, Residential Construction Output by Project Type (Real, US$ Million), 2016-2025
Figure 29: Turkey, Residential Construction Projects Pipeline, Value by Stage (US$ Million)
Figure 30: Turkey, Real Estate Activities Value-Add (TRY Million, 2009 Chain Linked Volume Measures)
Figure 31: Turkey, Building Permits Issued (Total Number)
Figure 32: Turkey, House Sales (Total Number)
Figure 33: Turkey, Residential Property Price Index (RPPI) (2017=100)
Figure 34: Turkey, Headquarters of Key Contractors (% of Total Project Pipeline)
Figure 35: Turkey, Headquarters of Key Consultants (% of Total Project Pipeline)


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