29 Jan 2020
Posted in Construction
Turkey’s 11th five-year plan to revive construction industry growth with output to reach $230bn by 2024, says GlobalData
Spurred on by the Turkish Government’s focus on developing transport, residential and energy infrastructure, as well as the investments under its 11th five-year development plan 2019–2023, the country’s construction industry is expected to recover from the current slump and rise to $230bn in 2024 – measured at constant 2017 US dollar exchange rates.
GlobalData’s report, ‘Construction in Turkey – Key Trends and Opportunities to 2024’ reveals that the industry’s growth will be supported by investment in transport infrastructure. Danny Richards, Lead Economist at GlobalData, comments: “Under the Vision 2023, the government aims to boost economic growth by 2023, under which it aims to build 13,478km of new roads, and 5,748km of new highways by 2023. The government also aims to develop 10,000km of high-speed railway line across the country by 2023.’’
The total construction project pipeline in Turkey* stands at US$508.0bn. The pipeline, which includes all projects from pre-planning to execution, is relatively skewed towards late-stage projects, with 58.1% of the pipeline value being in projects in the pre-execution and execution stages as of December 2019.
Danny Richards, Lead Economist at GlobalData, comments: “The downturn in construction activity in Turkey deepened in 2019, with the industry contracting by an estimated 8%, following a 2.1% drop in 2018. The country’s economic woes have severely impacted construction activity; the depreciation in the lira and high interest rates have pushed up construction costs and also the cost of borrowing such that the viability of projects has been eroded, and firms are reportedly bringing projects to a halt.
“Increasing numbers of construction companies have also collapsed or sought bankruptcy protection. However, there are signs that the worst may be over, with positive economic growth projections for 2020 along with expectations of further cuts in interest rates.”
GlobalData expects construction output to recover in 2020, with growth continuing in the following few years. This will be driven by investments under the 11th five-year development plan 2019–2023, under which the government aims to turn the country into a $1.1 trillion economy, as well as generate $226.6bn of income from exports by 2023.
* As tracked by GlobalData and including all mega projects with a value above $25m