Turkey statistics update: Construction turnover and production rise
Published on 07/04/2015
The latest statistics from Turkey's construction industry have just been released, showing a sector in the midst of continual, long-term improvement. A number of factors showed improvement year-on-year, as an increase in house building and major construction projects boosted the nation's economy.
Improvement on this scale is rarely without negatives, however. The growth of the sector has led to an increase in building costs as demand for firms rises. However, the positives far outweigh rising prices, which tend to occur whenever a country's construction industry grows. Here are the latest statistics from Turkey's building sector:
Production and turnover
The most recent statistics to come out of Turkey are the production and turnover indices for the construction industry. These show steady growth over the last year, which is a clear positive for the sector.
In 2014, the construction industry's turnover increased by 4.6 per cent when compared to the year before. In the last quarter of 2014, this rise continued as the turnover index improved by 0.9 per cent compared to Q3. This is still slightly lower than the high point seen in Q1 of 2014, but Q1 2015 is expected to see an even greater rise.
Meanwhile, overall production rose by 3.0 per cent in 2014 compared to 2013. However, while last year saw an average increase in production, it slowed down slightly at the end of the year as Q4's production was 0.7 per cent lower than Q3's. This is a sign of a levelling off of the construction industry after over two years of consistent growth.
Building permits
These increases have been spurred on by a drastic rise in the number of buildings being constructed, as shown by the latest building permit statistics. Last year, 137,632 building permits were granted by the Turkish government; a 13.5 per cent increase on 2013.
These new buildings are also larger on average than in 2013, as the total floor area of buildings granted permits in 2014 rose year-on-year by 24.3 per cent to a total of 217,664,482 sq m. However, the largest increase was seen in the value of Turkey's new constructions, which shot up to over $67 billion; a rise of 37.2 per cent.
Construction cost
The construction of this many expensive buildings has raised the cost of hiring staff and purchasing materials, which is generally the case in situations like these as demand rises. However, while the price of construction has risen slightly, it appears to be levelling off as the market becomes more competitive.
Last year, the cost of construction rose by 9.5 per cent overall. However, in the last quarter of 2014 it rose only slightly, by 0.1 per cent. The price of construction materials actually dropped by 0.2 per cent, while labour costs rose by 1.1 per cent.
It seems that the cost of construction has levelled off, after a period of rapid increase at the beginning of 2014. This is good news overall for Turkey's sector, as it means the building industry is still attracting more capital, but investors are not being put off by skyrocketing costs.