IMSAD February Sector Report: Construction Industry Outpaces General Economy with 9.3% Growth
The February results of the Monthly Sector Report, prepared regularly by the Association of Turkish Construction Material Producers (Türkiye İMSAD), have been released.
The report highlighted that the construction sector expanded by 8.7% in the fourth quarter of 2024, while its third-quarter growth was revised upward from 9.2% to 11.1%.
It was noted that tightening monetary policies had a limited impact on the construction sector. Reconstruction efforts in the earthquake zone, post-local election urban transformation projects, and general building activities served as primary drivers of this growth. The report also emphasized that the construction sector has maintained continuous growth for the past 9 consecutive quarters.
Construction Materials Production Up 0.95% in Q4
According to the report, construction material industrial output remained weak in the second half of last year. Production was influenced by developments in both domestic and foreign demand. Stagnant international demand throughout the year negatively impacted overall output.
Domestic demand remained active until the first quarter, but began to slow down from the second quarter onward due to disinflationary and tight monetary policies. Shrinking in the third quarter, domestic demand remained subdued in the fourth quarter as well.
In the third quarter of 2024, as working days normalized, political impacts dissipated, and tight fiscal and monetary policies expanded, clear contractionary effects were observed on domestic demand and materials production, resulting in a 2.2% decline. In the final quarter, output rebounded slightly with a 0.95% growth rate, supported by export growth and a mild recovery in domestic demand.
Construction Sector Outperformed the General Economy
The report underscored that the construction sector’s 9.3% growth rate in 2024 surpassed the 7.2% recorded in 2023. Following a five-year contraction, the sector’s strong performance over two consecutive years was largely driven by rebuilding projects in the earthquake region.
Throughout all quarters of last year, as well as for the full year, the construction sector outpaced the overall economy. In Q4 2024, the general economy grew by 3%, whereas the construction sector achieved 8.7% growth. While tightening policies caused a slowdown across many industries, the construction sector saw a milder impact, whereas the real estate sector grew at a weaker pace of 2.4%.
Sectoral Growth Not Fully Reflected in Manufacturing
Despite the construction sector expanding by 9.3% in 2024, production growth in the construction materials industry remained limited to 1.4% annually.
The report explained that the high demand generated by the construction sector was largely met through existing inventory, with sales channels, dealers, and manufacturers relying heavily on stock reserves rather than new production.
