Contractors Project Warning: There’s a Problem

According to the statement made by the Turkish Contractors Association (TMB), the Association has published its January report, which assesses the evolution of the construction sector in the October-December period of last year.

In the analysis of the “Construction Sector Analysis Report” titled “Global Economic Contraction, Recession Added to Inflation Discussions”, data from the global, national and construction sector economies were discussed.

In the report, it was pointed out that the continuous increase in the costs of inputs and the problems of high inflation due to internal and external dynamics in 2022, as well as insufficient allocations and delays in partial payments continued to have negative effects on the sector.

In the report, which emphasized that further steps to solve the problems of public contractors and the housing sector are expected in 2023, it was underlined that the latest government campaigns to support production in the housing sector were positive.

BUSINESS VOLUME OF 17.8 BILLION DOLLARS IN 2022

In the report, the information that Turkish contractors reached a new turnover of $17.8 billion with 454 projects in 2022, said: “The size of the international project portfolio that the construction sector has reached since its first opening to the foreign market with Libya in 1972 are 11,605 carried out in 133 countries, with the project a total of 472,000 million dollars has been reached”.

In the report, which draws attention to the expectation that cash deficits in countries will limit investments in global infrastructure with the loss of momentum of the world economy this year, it is reported that the financing opportunities of international institutions for investments in renewable energy have increased. .

COST INCREASE CREATES PROJECT PROBLEMS

The report stressed that increases in construction costs create significant problems in the development of new projects or the execution of public projects.

Home sales, which had been on the rise for some time due to the tendency of investors to buy real estate in the last quarter of 2021 in order to protect themselves from inflation, began to slow in the summer of 2022 and then began to decline. .

“It is considered that support such as the advancement of social housing and the housing credit campaign with adequate conditions for middle-income people can provide partial relief in this area of ​​the sector.

The ‘New Home Campaign’, which will reduce interest rates on housing loans below the psychological limit of 1 percent, is expected to have positive effects on the sector. Mobility in the sector will be ensured with the production of new homes in the peripheries of the big cities of Anatolia”

CONCRETE EXPECTATIONS OF THE PROJECT WITH THE GULF

The report informed that the OST continues its contacts for the reconstruction of Ukraine, and that the recent political relations with the Gulf countries, especially Saudi Arabia and the United Arab Emirates (UAE), may have concrete reflections on the sector in the future in the form of new projects.

In the report, which emphasized that the countries of the Far East and Latin America, especially the Sub-Saharan African region, are closely watched by the sector as potential markets, the following was noted:

“Funding opportunities from international organizations for investments in renewable energy have increased. Within the framework of energy prices, which are expected to continue an upward trend in the event of an increase in demand from Asian countries, new projects to be implemented in the oil markets of the Middle East and Africa, where contractors Turks are active, they will be able to support the sector.

With the war in European countries and within the framework of the European Green Agreement, new opportunities for the sector may arise from energy investments and renovation projects. Public-private partnership projects, in which Turkish contractors, whose applications are increasing in target markets, have experience, will offer opportunities for the sector.

DIGITAL CONSTRUCTION TECHNOLOGIES

The report indicates that TMB maintains close contacts with international development banks and export credit institutions such as the Turkish Eximbank, the European Bank for Reconstruction and Development and the Danish Eximbank, in the field of coverage of financing needs.

In the report, which stated that the declining profitability of construction projects in Turkey and in the world has made digitization a necessity, the following assessment was made:

“While ‘building information modelling’ is frequently used in the Turkish construction industry, applications such as augmented reality, blockchain and smart contracts have not yet found much space. By prioritizing support for start-up initiatives based on digital construction technologies in our country, TMB has been acting as a platform in this regard for some time, bringing start-up initiatives and partners together for innovative solutions.