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New Report Available: Turkey Infrastructure Report Q3 2013

New Construction research report from Business Monitor International is now available from Fast Market Research


Boston, MA -- (SBWIRE) -- 06/24/2013 -- Turkey has a healthy construction pipeline, complete with numerous high-profile projects within both its infrastructure and residential/non-residential sectors, underpinning strong construction industry growth. This positive outlook across the industry is supported by strong economic growth forecasted by BMI's country risk team; 4.8% average year-on-year real growth in Turkey over our forecast period far outstrips any developed market in the region, making Turkey an attractive investment destination. An improving monetary situation will go some way to address the financial troubles infrastructure projects have faced over the previous year, which has dragged the sector's performance down.

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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 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 2013-2022 is forecast at 5.3%.

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 rail sub-sector could see a considerable boost its planned privatisations and break-up of the Turkish rail operator TDCC. The prospect of a Chinese loan to fund the construction of a US$35bn high-speed train line spanning 7000km between Edrine and Kars is still on the table, although we highlight the risk of that money never materialising. Furthermore, the final stretch of the Istanbul to Ankara high-speed rail link is likely to be concluded in 2013.
- The bidding has begun on the first phase of Istanbul's third airport. This reaffirms our strong outlook for the airport sub-sector in Turkey. We now see annual average real growth of 9.0% between 2013 and 2017.
- Progress on a number of road projects, from the North Marmara Highway project and the beginning of construction on the Izmit Bay Crossing of the Istanbul-Izmir motorway to the financial close reached on the Istanbul tunnel to link the Asian and European sides of the city. In addition to a number of other projects, this activity is promoting strong growth in the road infrastructure sector, which we expect to average 7.4% between 2013 and 2017.

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