Market Monitor - Construction industry - Turkey

Market Monitor

  • Turkije
  • Bouw

Payment experience has been bad over the past year, and insolvencies increased in 2015.

  • Turkish construction growth slowed to 1% in 2015, as investments and purchasing activities were negatively affected by political uncertainty around the two general elections held in June and November 2015. Another negative factor was the sharp depreciation of the Turkish lira.
  • In 2016 the sector is forecast to grow 2.5%, as the risk situation in public construction has eased somewhat, while residential construction still struggles with overhead supply.
  • Profit margins have deteriorated in 2015 due to increasing labour and raw material costs and exchange rate volatility. Additionally, with too many players in the market, a serious supply-demand imbalance was observed in 2015, causing severe price wars.
  • Bank loans to construction businesses have sharply increased since 2010, and account for more than 10% of total bank loans. Due to the high indebtedness in the construction sector, businesses have to provide significant collateral when lending.
  • Payment duration in the industry is 120-180 days on average. Payment experience has been bad over the past year, and non-payment notifications and insolvencies increased in 2015 due to the high indebtedness of businesses. Non-performing loans in the construction sector amounted to EUR 1.3 billion in November 2015 (3.% of all loans in this sector).
  • It is expected that non-payments and insolvencies will level off in 2016.
  • Our underwriting stance on construction companies remains restrictive, with the exception of businesses related to strong groups and companies without liquidity problems.
  • Caution is also advised for companies doing business in Russia and Iraq.
  • In the medium- and long-term, the sector should benefit from population growth and urban development.

Gerelateerde documenten

Disclaimer

De informatie in dit document wordt uitsluitend ter algemene informatie verstrekt en hieraan kunnen geen rechten worden ontleend. De toepasselijke voorwaarden zijn te vinden in de polis of de betreffende product- of dienstverleningsovereenkomst. Niets in dit document mag worden opgevat als strekkende tot enigerlei recht, verplichting, verantwoordelijkheid of advies aan de zijde van Atradius, en derhalve ook niet tot enigerlei verplichting tot het uitvoeren van due diligence op afnemers of ten behoeve van uzelf. Indien Atradius due diligence op een afnemer uitvoert, gebeurt dit ten behoeve van haar eigen acceptatiedoeleinden en niet ten behoeve van de verzekeringsnemer of enige andere persoon. Daarnaast zijn noch Atradius noch enige aan haar verbonden ondernemingen, deelnemingen of dochterondernemingen aansprakelijk voor welke directe, indirecte, speciale, incidentele of gevolgschade dan ook voortvloeiende uit het gebruik van de in dit document opgenomen informatie.