Construction sector to grow 5 percent in 2017.

Construction sector to grow 5 percent in 2017.

The Construction Sector Report 2016, which was published in the Building-Industry Center, predicts that the construction sector, which employs about 2 million people, will grow by 5 percent with the projects continuing in 2017. Exports of building materials are expected to increase to between 16-16.5 billion dollars.

The Building Sector Report 2016 prepared with the support of the leading companies of the building industry center. Can Fuat Gürlesel’s presentation was announced at a meeting attended by industry professionals. Economist-writer Mahfi Eğilmez, BloombergHT Editor-in-Chief Cüneyt Başaran and Publishing Director of Fortune Turkey Magazine Cuneyt Toros evaluated the report and shared the 2017 forecasts for the building sector on the axis of the world and the Turkish economy.

The Turkish construction sector has been impressed by the developments experienced in 2016 and has performed well over the economy and other sectors. The construction sector is projected to grow 6 percent in 2016. With the new method that has been started to be used in the calculation of mileage income, the share of construction sector in national income has exceeded 8 percent. Employment averaged around 2 million during the year. A new record year has been experienced in residential sales. The permits for housing construction were realized above last year. Housing price increases remained below inflation. In the real estate sector, the year 2016 was stable. New investments have been postponed and leases have decreased. As a result, building licenses for commercial buildings have declined. There has been a significant decline in foreign contracting services.

Depending on these developments, the building materials sector has also experienced a fluctuating year. It is predicted that the building materials domestic market will grow by 17.6 percent and reach 290.4 billion TL in 2016. The building materials market has also become dominant in the domestic market in 2016. Exports of construction materials declined by 10.2 percent to $ 15.2 billion. Imports increased by 1.9 percent to $ 9.3 billion. Due to these developments in domestic and foreign markets, industrial production of construction materials has grown only 0.4 percent in 2016. Since the last quarter of 2016, the construction and housing sector has received numerous support. These supports hope for the construction sector for 2017. It is predicted that the construction sector will grow by 5.0 percent in 2017.

Building industry professionals and press attended the meeting with great interest Economist Writer Mahfi Eğilmez, BloombergHT Editor-in-Chief Cüneyt Başaran and Publishing Director of Fortune Turkey Magazine Cuneyt Toros shared the 2017 forecasts for the world and the Turkish construction sector.


Economist-writer Mahfi Eğilmez, who stated that the failure of structural reforms is the biggest obstacle in the long term before the development of Turkish economy, he made the following evaluation:

“We knew that 2016 would not be easy, but it was worse than we expected. We had a year in which the biggest shocks that could have happened in the markets, the worst-case scenario turned into reality. There were big surprises such as Donald Trump winning the presidential election in the US, the coup attempt, and the UK’s decision to leave the European Union. Globally, the growths that were below expectations in all sectors were recorded. This environment was negatively affected in Turkey. We started with Trump’s point of view in 2017 and the dollar’s rise. The dollar index reached 103 levels after Trump won the election. In the first period of the year, the TL lost much value due to the effects of our internal dynamics. We can say that 2017 is a year when your uncertainty prevails. In the face of the usual US free trade development policy, Trump began to implement more conservative policies. In contrast, Chinese President Shi Cinping began to defend the liberalization of trade. Direction is difficult to find in this environment. But the US appears to be; The EU is recovering slowly. On the other hand, it is positive that the Chinese economy has a better picture than the estimates. Negativization of economic data from China may draw the world in a negative direction.

For Turkey, I am looking forward to recovery after seeing growth in growth. I believe that the construction sector, which is the locomotive of Turkey’s growth, will have a great share in growth in 2017 as well. I think that investments in the public sector may increase. A better landscape and construction building materials market than 2016 will be revived. I am not suffering from a 2.5 percent drop in the budget deficit, which is under control. I foresee that the construction sector in Turkey will be better in 2017 than last year. ”


Adverse impact of 2016 on the sector reduced by measures

In the second half of the past year, raporda was expressed that the coup attempt and the performance in the construction sector decreased as a result of increasing geopolitical risks. Temporary incentives provided to the construction sector, housing campaigns and facilities provided by the financing have been limited. Housing request; Especially in the last quarter, sales and credit and interest campaigns, and home sales rose by 4.2 percent to 1.34 million people. The growth in housing loans, which support housing demand, was 9.4 percent in 2016, and housing loans stood at 157 billion TL.


Despite the increase in demand for housing, new housing prices increased by 9.4 percent in 2016, showing an increase in line with inflation. Foreigners’ real estate purchases from Turkey fell by 0.9 percent in the first 11 months of 2016 to $ 3.85 billion. It is stated that global financial fluctuations and geopolitical developments as well as the uncertainties in Turkey are decisive in the decline.


Building permits received in the construction sector are considered as an important indicator for the construction activities after a period of time. Raporda is pointing out that the uncertainties and fluctuations experienced throughout the year have limited building permits. Building licenses received in the first 9 months of 2016 increased by 6.1 percent in square meters, while building licenses for residential buildings increased by 10 percent. Building licenses for non-residential buildings decreased by 5 percent. According to the report; Building construction costs were 7.7 percent and construction material costs were 6.9 percent over the previous year, But increased below inflation.


Major investment projects that continued in 2016 in the public sector contributed significantly to the construction and construction materials sector. In the 2016 investment program, while public fixed capital investment amounting to TL 101 billion is planned, 64,9 billion TL appropriation has been allocated to 3,008 projects included in the investment program. Thus, allowances increased by 21.3 percent compared to the previous year. Priority has been given to transportation sectors such as education, health, drinking water and sewerage, irrigation, science-technology, information and especially railway, port and logistics centers in public investments.


Source: NTV