Growth Expected in the Construction Materials Industry

Tayfun Küçükoğlu, President of the Turkish Construction Material Industrialists' Association (İMSAD), said that they expect 6-7 percent growth in 2021 in the sector, which followed a fluctuating graphic in 2020.

Stating that the first factor that will determine the 2021 performance of the sector will be the course of the pandemic in the world and in Turkey, Tayfun Küçükoğlu, President of the Turkish Construction Material Industrialists' Association (İMSAD); stated that the other main factors are the monetary policy to be implemented in the economy and the reforms to be made in various fields, including the economy.

Küçükoğlu said that tight monetary policy and high interest rates limit the 2021 performance of the construction industry and construction materials industry.
TIGHT MONETARY POLICY AND HIGH EXCHANGE CAN LIMIT PERFORMANCE

In his evaluation to Reuters regarding the future expectations of the sector, Küçükoğlu said, “We have an expectation of 4% growth in the construction sector in 2021, and around 6-7% in the construction materials industry. We think that the first main factor that will determine the 2021 performance will be the course of the pandemic on a global scale and in Turkey, and the other factor will be the reforms to be made in the fields of monetary policy, economy, law and democracy to be implemented in the economy," he said and added:

“It is predicted that the Central Bank will maintain its high policy rate for a significant part of 2021 as well. Accordingly, housing loan and TL commercial loan interest rates are expected to remain high. Therefore, tight monetary policy and high interest rates are likely to limit the 2021 performance of the construction industry and construction materials industry.”
GROWTH IN TWO QUARTERS, SHALL SHALL IN ONE QUARTER

According to the information given by Küçükoğlu, the construction materials industry, which grew by 8 percent in the first quarter of 2020, shrank by 8 percent in the second quarter. The sector recorded a growth of 14.4% in the third quarter.

“Growths continued in the last quarter, but towards the end of the year, business started to slow down again as a result of the second wave of the epidemic, which started to be experienced more strongly in the country and abroad,” Küçükoğlu said.

According to IMSAD's December Sector Report, the current level of jobs decreased by 11.3 points in December compared to the previous month. New business orders also fell 5.9 points in December.
NEW ORDERS INCREASED IN JUNE AND JULY

Küçükoğlu said, “While new job orders in the sector increased significantly in June and July, saturation began to be experienced in job orders in the August-November period. In December, on the other hand, the level of new business received a noticeable monthly decrease. After the completed works, new orders will start to increase again after the winter months and with the decrease of the effects of the Covid-19 epidemic.

Küçükoğlu stated that although the closures and restrictions due to the Covid-19 pandemic are expected to continue at the beginning of 2021, they think that the impact of the global epidemic will decrease in the second quarter of 2021.

Küçükoğlu stated that the general loan growth is expected to remain at the level of 15 percent in 2021; He said that the growth in the loans used by the construction sector has slowed down and that the continuation of this situation may limit the performance of the construction sector and the construction materials industry.