Turkey Construction Market Size, Trend Analysis by Sector (Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential) and Forecasts, 2022-2026

Turkey Construction Market Size, Trend Analysis by Sector (Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential) and Forecasts, 2022-2026

Summary

The Turkish construction industry is expected to decline by 9.9% in 2022 and 3% in 2023, owing to weaknesses in the Turkish economy amid the ongoing lira crisis and disruption stemming from the Russia-Ukraine conflict. Despite strong nominal growth in the industry, soaring inflation stemming from the weak lira and the country’s struggle to reduce its dependence on imports has increased pressure on developers’ costs and consumer demand which has been the primary driver of weakening construction activity in real terms. The latest data from Q3 shows a Y-o-Y decline in output of 14.1% in value add terms, marking an acceleration from a decline of 9.9% YoY in Q2 and 7.7% YoY in Q1. Moreover, construction costs accelerated in Q3, rising on average by 117% YoY, driven by a 130% increase in the cost of materials and an 84% increase in the cost of labor The rise in labor costs this year reflects the government’s minimum wage hikes in January and July 2022. Further minimum wage hikes expected in the first half of 2023 ahead of the general election in June are likely to put further pressure on construction costs. Moreover, the residential sector, which accounts for almost two-thirds of Turkey’s construction industry, will continue to face significant challenges as demand wanes amid soaring property prices owing to the weak lira and high construction costs feeding into prices.

Assuming greater macroeconomic stability in 2024, the construction industry is expected to register an annual average growth rate of 5% 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 Erdoğan allocated TRY20 billion ($1.2 billion) for the construction industry in order to finish incomplete projects. Furthermore, in April 2022, the president announced the “Transportation and Logistics Master Plan” with an investment plan of TRY3.4 trillion ($198 billion) in transport, rail freight with an aim to be logistics superpower by 2053. Under this plan, the government plans to expand railway network from 13,022km in 2021 to 28,590km by 2053. Later, in December 2022, the government revealed its intentions to increase the investment amount from TRY3.4 trillion ($198 billion) to TRY35.5 trillion ($2.1 trillion) until 2053 for the execution of the projects in line with the Program. This extra investment will support the construction of new ports and renewable energy infrastructure.

The 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 (2017-2021) and forecast (2022-2026) 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.