Sector group declares 2016 a loss for foreign construction projects
ANKARA2016 is a lost year for Turkey’s construction projects abroad after more than a decade of rapid rise due to several factors, including escalating risks in neighboring countries and the ongoing oil slump, a leading sectoral association has said.
According to the latest sector assessment report by the Turkish Contractors Association (TMB), Turkish companies undertook a total of 65 new projects worth $4.1 in the first nine months of the year, according to official data. This is the lowest for Turkish construction companies since 2001, when they made projects worth $2.9 billion in total. The volume of their projects has increased rapidly since 2002, reaching a peak point in 2013 at $30.1 billion before a sharp decrease in 2016.
“This decline in the number of projects in foreign countries has been mainly due to geopolitical problems in Turkey’s main markets. In addition to this, the oil plunge has also negatively affected investments in Turkey’s neighboring oil exporter countries. In this vein, it will be key for Turkish construction companies to diversify their foreign markets so as to include, for instance, sub-Saharan Africa,” said the association.
The TMB also noted that the normalization in ties with Russia would also enable Turkish companies to become strong in that key market once more.
There has also been a change in the market variation for Turkish companies over this year.
Turkish companies undertook a total of 8,772 projects worth $329.1 billion in 110 countries between 1972 and 2016. Russia, Turkmenistan, Libya, Iraq and Kazakhstan had been the largest markets for Turkey, but they were replaced by Bahrain, the United Arab Emirates, Kuwait, Morocco and Senegal at the beginning of 2016, according to the report.
The association also said there was some slowdown in the domestic housing market due to rising risks in economic expectations and a loss in the Turkish Lira’s value.