BMI View: Turkey's healthy construction pipeline, complete with numerous high-profile projects within both its infrastructure and residential/non-residential sectors, has seen projects both added and delayed over the last quarter. While we continue to see long-term strong construction industry growth, the delays, in addition to a glum economic outlook, have caused us to downgrade our forecasts for 2014. The short-term outlook has been dented by headwinds in the economy, which have caused BMI's Country Risk team to downgrade Turkey's economic growth forecast for 2013. Still, 5% average year-on-year real growth in the construction market over our forecast period far outstrips any developed market in the region, making Turkey an attractive investment destination.
There are downside risks to Turkey's healthy construction sector outlook, which come in the form of the European debt crisis, structural flaws in the domestic pension and banking sectors making project financing difficult, along with the increasingly high cost of credit. Together, these factors resulted in a tough year for the industry in 2012. However, as we pointed out at the time, activity in the equity markets did not indicate that major Turkish construction players are unduly concerned, and on the back of a strong project pipeline, we maintain a healthy growth outlook. This view is now playing out. Average real construction industry growth for the period 2014-2022 is forecast at 5%.
We see sustained healthy growth in Turkey's construction sector over our 10-year forecast period; however, due to the country's history of high volatility and abrupt trends, in addition to the potentially far-reaching repercussions for the Turkish economy if there were to be a contraction in the construction sector, we are keeping a careful eye on any developments.
Key developments over the last quarter:
The Turkey Infrastructure Report features Business Monitor International (BMI)'s market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Turkey Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Turkish infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Turkey to test other views - a key input for successful budgetary and planning in the Turkish infrastructure market.
- Target business opportunities and risks in the Turkish infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Turkey.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI's key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant multinational and national company developments.
These are broken down into Construction (social, commercial and residential), Transport (roads, railways, ports, airports etc), and Energy & Utilities (powerplants, renewable projects, pipelines and so on).
Analysis of latest projects across the infrastructure sector (covering the transport, utilities and commercial construction sub-sectors) - including:
Market Overview:Analysis of the key elements driving developments, including evaluations of current capacity and future requirements.
Building Materials Overview
The building materials overview provides industry trend analysis on the global and regional demands for building materials and the impact of this on the emerging and developed markets.
Business Environment Ratings
BMI's Infrastructure Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (construction companies, suppliers and partners) in the regional infrastructure market.
The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data point.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry & Economic Forecasts
Historic data series (2008-2012) and forecasts to end-2018 for all key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecast. Indicators include:
Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%).
Infrastructure: Value (US$bn); contribution to construction industry (%); real growth (%) of transport infrastructure (broken down by railways, airports, roads and bridges, ports and harbours) and energy and utilities (broken down by power plants and transmission grids, oil and gas pipelines, and water infrastructure).
Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$).
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.