Construction and Building Industry
Sub Categories and Products for Construction and Building Industry
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Turkey's construction sector cashes in on government's infrastructure bonanza.
Overview
The Turkish construction sector grew by 7.1% in 2013, up from 0.6% in the previous year, becoming one of the main drivers of the local economy. The construction permits statistics point to a sustained growth of the sector in 2014. Despite the weaker performance in the last quarter of 2013 and the first three months of 2014, the industry's growth rate remains higher than that of the entire economy. The medium and long-term outlook for the sector remains optimistic due to growing population and the rapid urban development as well as the rising incomes in the country. The number of people employed in the construction sector stood at 1.9 million at the end of April 2014, or 7.3% of the total workforce in Turkey.
Growth
The total volume of construction spending in gross fixed capital formation rose to TRY 38.7 billion in the first quarter of 2014, up by 18.1% from the previous year. The total value of construction industry rose by 18.4% to almost TRY 19 billion in the first quarter of 2014. Despite the weaker real growth, the industry continued to expand quicker than the entire economy.
In 2013, the government introduced an Urban Transformation project, which envisages the replacement of risky buildings with new earthquake-resistant ones. Some 6.5 million buildings should be demolished and reconstructed over 15 to 20 years, with some 400,000 units planned to be destructed in 2014. The project will provide an additional impetus to the demand in the construction and related industries, such as cement manufacturing.
Infrastructure boost
The government has launched a number of large-scale infrastructure projects, including a third bridge over the Bosphorus strait and a third airport in Istanbul, which will further underpin the industry's growth. The list of future projects includes two nuclear power plants in Mersin and Sinop, pipelines construction and an artificial waterway called Canal Istanbul.
Turkey will need to invest some USD 700 billion in infrastructure projects until 2023, Deputy Prime Minister Ali Babacan said in June 2014. Of these, about USD 200 billion are to be spent through public-private-partnerships (PPP).
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