Prepared by the umbrella organization of the sector, Turkish Construction Materials Industrialists Association, (Turkey İMSAD), ‘March 2019
Sector Report’ features the following aspects. Production realized by construction materials industry completed 2018 with 2 percent recession.
In January, 2019, construction material average industrial production recessed by 24.3 percent compared to January, 2018. Thus, the severe
recession in production, which commenced in the second half of 2018 continued in 2019 too. Decline in construction works and sharp decrease
of internal demand had influence on the decline in production. With the impact of seasonality and disturbance in domestic market conditions,
domestic demand maintained its decrease. Increase in export figures could not compensate for the production loss.
Production in January, 2019 declined throughout 22 sub-sectors compared to the same month of the previous year. High production losses
were experienced in many sub-sectors. The highest production decrease in January, 2019 was in the ready-mixed concrete sector with a rate of
53.9 percent. Parquet and flooring production decreased by 50.7 percent, central heating system radiator panel and water boiler production
decreased by 37.8 percent. Ceramic lamination materials production declined by 30.1 percent. Production regression in 14 sub-sectors was
above 20 percent. Cooling and ventilation equipment sub-sector, with a decrease of 0.7 percent, achieved the most limited regression.
Import in January declined by 31.4 percent
Recession in construction materials export, which started in the second half of the previous year continued in the new year too. Export in January, 2019 declined by 31.4 percent compared to the same month of the previous year and became 539 million dollars. The sharp decline in import also indicated that recession in construction works continued in the new year. Despite the relative stability in foreign exchange rates, the strong recession in import demand is going on.
Annual import fell under 8 billion dollars
Construction materials import had a significant decline in 2018 and went down to 8.1 billion dollars. Sharp recession in import continued in the first month of 2019 and consequently, annual import in January, 2019 went below the level of 8 billion dollars and was realized as 7.8 billion dollars. Fluctuation in foreign exchange rates and recession in construction works had impact on the continuity of the recession in import.
Export in January declined by 0.6 percent
Construction materials export recessed in the first month of the new year. Increase in export which slowed down and came to a standstill in December, 2018 turned into recession in January. Export in January, 2019 declined by 0.6 percent compared to the same month of the previous
year and went down to 1.61 million dollars. Thus, the lowest monthly export of the last 12 months was realized in January. Construction materials industry gives emphasis to export against the strong recession in the domestic market, in 2019 too. However, export is becoming more
difficult together with the slowdown in the markets. It is observed that fluctuation in Turkish Lira had a negative influence on export.
Financial distress in the construction sector is going on
Financial distress in the construction sector continued in the first 3 months of 2019 too. With the regress in demand and sales, distress in cash flows continued in the new year too. Secondly, it is also observed that distress was going on due to high foreign exchange and interest rates in repayment of current bank loans.
