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Turkey Contractors Association has lately released its April 2018 Construction Sector Analysis.
In April 2018 Construction Sector analysis, Turkey Contractors Association has announced that it undertook 32 new projects amounting to $ 3.4 billion abroad in the first quarter of 2018, nine years protecting the world second position of the Turkish contractor. "This performance has been strengthened when compared to project costs of $ 2.9 billion in the same period of 2017 and of $ 1.1 billion in the same period of 2016," the analysts said.
In the analysis, it is evaluated that the TBMM's early election decision is favored by the markets in the light of the fact that the uncertainty has been lifted and that the effect of the CBRT's recent interest rate hike will be limited due to the risks stemming from the structural problems of the economy and the political agenda.
120 members with 70 percent of the contract works in Turkey, and the work done abroad that perform 90 percent of the umbrella organization of Turkey, Contractors Union Construction Union (TMB) announces April 2018 / Construction Sector analysis. In the April 2018 analysis titled "Trade Wars: Swords are Taken," all indicators related to the industry were interpreted in the light of global and national economic data.
"This performance is anticipated to recover for the overseas contracting services segment compared to project revenues of $ 2.9 billion in the same period of 2017 and $ 1.1 billion in the same period of 2016," according to the analysis of 32 new projects by Turkish contractors in the first quarter of 2018, has been strengthened ". Relations with Russia, which is the most important market for foreign contracting services, increase the business volume in the sector are also pointed out in the report. "In 2017, about 2 billion dollars project has been undertaken in Russia. However, the turbulent recovery in energy prices during the past period positively reflected the construction activity in the energy exporter markets, where Turkish contractors already had strong references, and thus the volume of business in the respective markets of Turkish contractors. "
A total of $ 359.2 billion in 119 countries
In the analysis, the latest figures for Overseas Contracting Services were listed as follows: "Turkish contractors have reached $ 359.2 billion in the cost of 9,309 projects undertaken in 119 countries from 1972 to the end of the first quarter of 2018. Projects undertaken since the beginning of overseas contracting services, according to regions, were 46.2 percent in Eurasia, 26.6 percent in the Middle East and 18.2 percent in African countries.
Global market started 2018 started with high risk appetite
In the analysis, while global markets are starting to look bullish with the expectation that the growth and trade data will recover in 2018 and the liquidity surplus will continue for a while; The strong monetary policy of the US reversed the wind in February, and the increasing stress in the markets in March caused the risk appetite to be placed on a risk diet. In this analysis, a US-China-based trade struggle, the US-Trump announced that the additional tax on steel and aluminum imports, which were called the first seeds of the global trade war, fell on the agenda as a bomb. In the analysis it was said: "In response to this retaliation that led to retaliation of tehdidine from the European Union, China has been warned to go to the end to protect its national interests. The last bomb, thrown by Trump, is going to increase economic tensions with many countries, not just China. IMF President Lagarde said, "It will not be the winner of the trade war." On the other hand, Trump's statement "Trade wars are good and easy to win" has increased tension. Not only by direct taxes and tariffs of possible trade war, but also indicated via global supply chains can pose a serious risk to emerging economies including Turkey. It’s also declared that despite the strong resistance of the dynamics of the real economy, Turkey will continue to take its share of the global wave of asset sales. "
Turkey Contractors Association Construction Industry April 2018 report has identified the following summarizes regarding the general economy and the sector:
EARLY POLL DECISION: The TBMM's early election decision has been generally favorably evaluated by many private sector representatives in terms of the fact that the uncertainties have just begun to disappear and the economy can focus on the structural reform agenda in the second half of the year.
THE INTEREST INCREASE DECISION WILL BECOME LIMITEDLY EFFECTIVE: Regarding the early election and interest rate increase decision, it is stated that this decision of the market which had already entered into the interest increase expectation was bought; for this reason the effect of the decision to raise the interest rate is assessed in the economic environment where it will be limited due to the risks stemming from the structural problems of the economy and the political agenda.
GEOPOLYTIC RISKS TO BE CONTINUOUSLY DETERMINATIVE: Geopolitical risks deepening in many regions may be decisive on the global conjuncture in the coming period. While tensions between Russia and NATO, Syrian and Iraq-oriented tensions, separatist movements across Europe, and problems in the Gulf continue, the discourse of Russia's invitation to the arms race raises uncertainty about the future.
RISK PREMIUMS OF COUNTRIES RISE: Uncertainty in question, the bridge between Europe and the Middle East due to its location in the map of geopolitical risks in focus brings about the possibility of an increase in the country risk premium for Turkey. On the other hand, as economic growth accelerates, the current account deficit and the rise in budget deficits, and the uptrend in inflation, are leading to questions about sustainability.
SECTOR KEEPS AN EYE ON RELATIONS BETWEEN US AND RUSSIA: The tension in the past period, sometimes climbed as US-Turkey, Turkey-Russia and EU-Turkey other political and economic developments that followed in the country with diplomatic relations will continue to be quite decisive on the market dynamics.
CONSTRUCTION SECTOR GAINED MOMENTUM: It has been observed that construction investments have grown strongly in the whole year. Construction expenditures have reached to 533.8 billion Turkish liras with an increase of 25.7 percent annually. During this period, housing, non-residential and infrastructure construction items all expanded. However, increasing stocks especially in the housing sector have the potential to suppress the growth effect of the construction sector in the coming period.
PROJECT-BASED ECONOMIC STIMULUS PACKAGE TO BUILD SATISFACTION: The Project Based Economic Stimulus Package, which will support 23 projects with an investment value of approximately TL 135 billion, has builded satisfaction in terms of accelerating investments and giving life water to the market. However, the necessity of achieving sustainable growth, improving the investment climate and increasing foreign direct investments, and the need for long-term and comprehensive reforms in order to reduce the risk premium are also ongoing. It is of great importance to develop policies aimed at qualitative, quantitative, both short-term and long-term.
NORMALIZATION FOR EXTERNAL FINANCING: Due to the high external financing needs, as overseas fund inflows of great importance for Turkey's economy, it is stated that the process of normalization of important domestic and foreign policy in the event will be held outside of structural reforms in the coming period. In this context, Turkey's economy can bring concrete steps to be taken back into balance, is reported to be able to re-establish the confidence of foreign investors.
BUILDING SECTOR ACHIEVED GROWTH OF 8.9 PERCENT: The direct share in GDP was 8.6 percent, while the indirect growth in affiliated sectors was 8.9 percent in 2017, the share of which reached 30 percent. Sectoral growth was measured as 5.2 percent in the first quarter, 5.5 percent in the second quarter, 18.6 percent in the third quarter and 5.8 percent in the last quarter.
HOUSING SALES REDUCED BY 2 PERCENT: Signs of stagnation in the housing segment were observed both in declining housing sales statistics in the first two months of 2018 and in real decline in housing prices. Total sales decreased by 5.4% in February compared to the same period of the previous year, while sales in the first two months of the year decreased by 2% on an annual basis.
HOUSE BUYERS RUN AWAY FROM CREDIT: Said to be related to the fact that housing prices are expensive and the average of 2.35 points in the past year, which is an increase in interest rates of housing loans and a decrease in interest rates, this table, is also related to general economic conditions and not wanting to be under the debt burden. From previous years to today, since rising exchange rates inflation and inflation have also increased the interest rates, the risk of using housing loans has increased and housing demand has declined.
Real estate sales to foreigner boomed in Turkey in first 2 months of 2019
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