Activity in Türkiye’s construction sector kept weakening in September, with most leading indicators remaining under the 100-point threshold and drifting towards bottom levels, according to the Turkish Ready Mixed Concrete Association (THBB).
The association’s monthly Ready-Mix Concrete Index report for September, released on Oct. 13, said stagnation in construction was continuing, downward pressure was building and there was no sign yet of a recovery.
Activity takes the sharpest hit
Of the sub-indices, the Activity Index posted the steepest monthly fall, dropping to 98. The Confidence Index recovered slightly over the month but remained well below the threshold, which the report read as a sign that market sentiment is still cautious.
Compared with September last year, all of the main gauges were lower. The Activity Index was down 1.7%, the Expectations Index fell 1.5%, the composite Ready-Mix Concrete Index declined 1.2% and the Confidence Index slipped 0.3%.
THBB groups these measures as leading indices for the construction industry, making the September readings an early signal of the conditions builders, including housing developers, are likely to face in the months ahead.
Financing costs and the fund crisis
THBB Chairman Yavuz Işık said construction and its related industries were being squeezed from two sides: high financing costs resulting from tight monetary policy, and a liquidity crunch in financial markets.
Işık pointed to the decision by the Capital Markets Board (SPK) in mid-September to place 131 funds managed by seven portfolio management companies into liquidation, saying the move had hit cash flow across the sector.
He also argued that money leaving financial markets could, over the medium to long term, shift into real estate as a safe haven. In the short run, however, he said cash shortages and high interest rates were keeping uncertainty elevated for builders and suppliers.
Sources
Photo: CEphoto, Uwe Aranas / CC BY-SA 3.0, via Wikimedia Commons
