BMI View: Turkey continues to offer investors a hugely diverse - if risky - portfolio of infrastructure opportunities, as the government continues to support the p rivatisation of assets and the use of PPPs . That said, significant macroeconomic headwinds centred around currency depreciation, tightening credit and political risk will drag on sentiment in the non-residential sector in particular .
Latest Updates And Structural Trends
We have maintained our view for tepid growth in the Turkish construction sector in 2016 and 2017, despite the industry slightly outperforming our expectations in 2015. We forecast real construction industry growth of 2.8% in 2016 and 3.9% in 2017.
Rail and road projects continue to see our forecasts for transport infrastructure growth remain buoyant at 4.8% in 2016. However, energy and utilities infrastructure growth has been lowered for 2016 on the back of the uncertainty surrounding Turkey's nuclear programme. Rosatom is reportedly looking to sell a 49% stake in the project.
The Turkish healthcare PPP projects continue to be a favoured infrastructure segments in Turkey and is a key supporting factor in our non-residential building outlook. In January 2016, the USD1.18bn Etlik Integrated Healthcare Campus project in Ankara reached financial close.
|f = BMI forecast. Source: Turkish Statistical Institute|
|Construction industry value, TRYbn||85.88||94.99||105.62||117.24||129.65||142.74||156.49||171.35||188.20||206.27||225.59|
|Construction Industry Value, Real Growth, % y-o-y||1.70||2.80||3.90||4.25||4.08||3.85||3.88||4.00||4.58||4.60||4.37|
|Construction Industry Value, % of GDP||4.4||4.4||4.4||4.4||4.5||4.5||4.6||4.7||4.8||4.9||4.9|
Turkey ranks in ninth place within the Central and Eastern Europe grouping of the RRI, with an overall score of 55.0.
The size and long-term growth potential of the Turkish infrastructure market is significant, but Turkey's banking sector remains reliant on expensive external financing. Turkey's Rewards score is 51.8.
Transparency in the tendering process remains a concern but more use of the public-private partnership model will begin to address this. Policy continuity under the AKP will help assure investments. Turkey's Risks score is 62.3.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
The Turkey Infrastructure Report features BMI Research'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.
- Benchmark BMI's independent infrastructure industry forecasts for Turkey to test other views - a key input for successful budgetary and planning in the Turkish infrastructure market.
- Target business opportunities and risks in the Turkish infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Turkey.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.