Turkish Construction Sector Grows for 11th Straight Quarter

The Turkish Contractors Association (TMB) has released its Third Quarter Construction Sector Analysis Report, providing an in-depth look at both global and domestic economic conditions shaping Turkey’s building industry. The findings reveal a sector that continues to expand but faces growing questions about sustainability, private investment, and financial pressure.

Construction Keeps Growing, but Risks Mount

According to the report, Turkey’s construction sector has now grown for 11 consecutive quarters. Data from the Turkish Statistical Institute (TÜİK) shows that construction spending rose 48.1% nominally, reaching ₺2.29 trillion, while real growth stood at 20.2% in the second quarter of 2025.

However, TMB warns that this surge is largely fueled by public spending. Private developers remain cautious amid weak demand and tight credit conditions, casting doubt on the long-term sustainability of growth. Meanwhile, the real estate sector, which grew 2.6% in the second quarter, is struggling to maintain momentum despite modest gains.

Indexes Signal Broader Economic Weight

The report highlights that construction’s contribution to overall economic activity continues to rise. In August, the total turnover index increased 36.7% year-on-year, while the construction turnover index jumped 53.2%.

Sub-sector data paints a clearer picture:

• Building construction rose 26.6% annually.

• Non-residential construction grew 17.4%.

• Private sector projects expanded 25.1%.

These figures point to sustained demand for housing and commercial buildings, while government-backed infrastructure projects continue to stabilize the sector and support employment.

Digital Transformation at Construction Sites

TMB’s report also underlines an important step toward digital transformation. New monitoring systems will soon allow project supervisors to digitally track daily site progress, including the number of workers, machinery used, and materials consumed.

This initiative aims to boost transparency, accountability, and efficiency in an industry long criticized for delays, waste, and poor oversight.

Turkish Contractors Abroad: Romania Tops the List

On the international front, Turkish contractors remain a global force. In the first nine months of 2025, the sector secured 128 new overseas projects worth $9.2 billion.

Among the top markets:

• Romania leads with $4 billion in contracts.

• Iraq follows with $1 billion.

These figures reaffirm Turkey’s reputation as one of the world’s top three international contracting nations, particularly in infrastructure, housing, and energy projects.

High Costs and Tight Financing Challenge the Industry

Despite strong headline growth, the report warns of mounting financial challenges. Persistent inflation, high borrowing costs, and limited access to long-term credit continue to squeeze private developers.

High housing loan interest rates have slowed new home sales and delayed private construction starts. As a result, many projects now depend heavily on public investment and urban renewal initiatives to stay afloat.

Globally, geopolitical risks, rising costs, and tighter financial conditions have led to a cautious approach across the construction industry. Domestically, Turkey’s state-backed projects play a critical role in maintaining production and employment stability, especially in infrastructure and transport.