Boston, MA -- (SBWIRE) -- 06/06/2014 -- BMI View: Turkey's construction industry should continue to perform well over the next year. A government guarantee and a buoyant pipeline of projects already under construction bode well for growth. However, political and financing risks have grown over the past year which we believe will dent investor interest in the market, leading to mor e moderate growth over the long term.
There continue to be downside risks to Turkey's healthy construction sector outlook stemming from the major depreciation in the lira making the cost of foreign credit prohibitively high, which exacerbates the underdeveloped domestic long-term financing market. Despite these factors and elevated political risk over the latter stages of the year, 2013 saw robust growth in the industry. That said, with a corruption probe having been launched in the early stages of 2014 we expect that growth may suffer over the medium-term as investors think twice about the market.
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Although we emphasise the downside risks of the corruption probe, on the back of a strong project pipeline, we maintain a healthy growth outlook. Average real construction industry growth for the period 2014-2022 is forecast at 5%.
Key project developments informing our forecasts:
Energy & Utilities
- Promising developments are also taking place in the energy and the utilities segment, where we expect growth to be led by the country's large population, low current per capita power consumption and historically high consumption growth.
- Turkey's power privatisation scheme continues, and will likely see large investments made in the sector. The distribution network has now been fully privatised and the government hopes to earn an additional USD13bn in revenues from the privatisation of the remaining portfolio of power generation assets.
- Two nuclear power stations have now been awarded to winning bidders. However, the construction of the first is now delayed due to a failure to secure adequate permits and approvals. As such, our...
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.
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