Construction sector hurt by dwindling investment

ISTANBUL - Hürriyet Daily News

The construction sector, which is the main artery of the Turkish economy, is losing momentum with almost zero percent growth in the quarter, says İMSAD Chair Bilmaç. Hürriyet photo

The construction sector is losing momentum and this is the first time the sector has registered nearly 0 percent growth since 2009, according to the leader of the Construction Materials Industrialist Association (İMSAD).

“The construction sector, which is the main artery of the economy, does not have a positive outlook,” said Hüseyin Bilmaç at İMSAD’s third annual economy meeting, titled “The Turkish Construction Sector’s Future and Sustainable Buildings.” Commenting on the growth figures released by the Turkish Statistical Institute (TÜİK) on Sept. 10, Bilmaç noted that the construction sector had only grown 0.4 percent since the second quarter of 2011. He added that they were most likely going to have to revise their growth targets for the sector. According to Bilmaç, the contraction in private sector investments in the second quarter of the year is the primary reason for the lull in construction sector growth. First-quarter private sector investments were nearly twice as much as second-quarter investments.

“The drop in the propensity to spend in the private sector has also negatively affected the construction sector,” he said.

İMSAD economic adviser Dr. Kerem Alkin, who also spoke at the meeting, reiterated that the construction sector was losing momentum.

An end to the soft landing?

“As the second-quarter growth figures were announced, we’ve begun wondering whether or not we’ve seen an end to the soft landing. We’ll see if there will be new risks to add to the existing global risks,” he said. He added that it looked inevitable that Turkey would be able to achieve more than 3 percent growth in 2012, but less than the government’s 4 percent growth target.

“Given these structural risks, it is debatable whether we shouldn’t increase growth to over 5 percent in 2013,” he stressed.

Soyak Holding Chief Executive Officer (CEO) Dr. M. Emre Çamlıbel, who also participated in the panel, said that recent steps in Turkey to make buildings more energy efficient were very inspiring and that according to the “Energy Efficiency Strategy Document 2012-2023,”one-fourth of Turkey’s buildings were slated to be sustainable.

“If all the new buildings were to become green buildings, this would save turkey $25 billion by 2023,” he said. Çamlıbel pointed to Istanbul’s Soyak Soho and İzmir’s Soyak Optimus green building projects and noted that with an additional $200,000 investment, they were able to save 30 percent on the water bill and 20 percent on the energy bill.