Jun 28 2018

Turkish construction costs surge in April

The cost of building infrastructure and housing in Turkey surged in April, reflecting further troubles for an industry hurt by high inflation rates and waning demand from homebuyers.

Costs, including labour, increased by 19.9 percent from a year ago, the highest since at least the start of 2017, and increased 2 percent compared with March, the State Statistical Institute said on Thursday.It was the fourth straight month of annual increases.

The price of building materials jumped a yearly 22 percent, while labour costs climbed 15.5 percent, the institute said.

Turkey’s government is providing incentives to construction companies, including lower mortgage rates at state-run banks, to offset a lull in demand for housing. The industry has been a main driver of economic growth under the government of President Recep Tayyip Erdoğan. House price increases have begun lagging inflation.

The lira’s slump against the dollar this year is leading to an acceleration in inflation across Turkey’s $775 billion economy. The rate of inflation for consumer prices accelerated to 12.2 percent in May and producer-price inflation exceeded 20 percent.

Turkish construction costs
Source: State Statistical Institute