Construction Sector Enters Final Quarter with Momentum, Ready-Mix Concrete Sector Hopeful for Q4

The Turkey Ready-Mixed Concrete Association (THBB) released the October 2017 Report of its "Ready-Mixed Concrete Index," which presents the current situation and expected developments in the construction sector and related manufacturing and services industries. In the report, the Ready-Mixed Concrete Index, a composite index, approached its threshold value in October while showing a 0.2 percent increase compared to the same month of the previous year.

Activity Index Shows Highest Growth in October Compared to Same Month Previous Year

The Ready-Mixed Concrete Activity Index for October was the index showing the highest growth with a 0.5 percent increase compared to the same month of the previous year. While 48 percent of surveyed companies stated that their sales increased in October, the share of those reporting a decline in sales compared to the previous month was 12 percent. The share of those reporting an increase in registered orders received was 44 percent.

Confidence Index Remained Below Threshold

The Ready-Mixed Concrete Confidence Index for October declined 0.2 percent compared to the same month of the previous year. The Confidence Index remaining below threshold showed that the sector's confidence in the economy was still not at the desired level. Twenty percent of survey respondents were considering new hiring, while the share of those considering new investment was 8 percent. Twenty-four percent of surveyed companies stated they believed orders given to suppliers would increase in the next three months.

Expectations Index Showed 0.2 Percent Growth

The Ready-Mixed Concrete Expectations Index for October, which is important in indicating the direction of the construction sector, showed a 0.2 percent increase compared to the same month of the previous year. Twenty percent of those surveyed believed their sales would increase in the next three months, while the share of those expecting sales to decline was 28 percent. The share of companies stating they would increase input inventories in the coming three months was 24 percent. "Residential sales set record in third quarter" Yavuz Işık, Chairman of the Board of the European Ready-Mixed Concrete Association (ERMCO) and THBB, commenting on the results of the Ready-Mixed Concrete Index October Report, said that the Activity Index, which had risen in July and August, declined in September due to the effect of the holiday period and approximately 10 inactive days that followed, but recovered in October. Noting that the construction sector was expected to demonstrate strong performance in the third quarter of the year, Yavuz Işık stated: "The October Activity Index value is important in showing how the construction sector started the final quarter of this year. Accordingly, the construction sector entered the final quarter with momentum. After the third quarter saw Turkey set a record with 180,000 new residential unit sales, entering the fourth quarter with the same pace demonstrates that, contrary to expectations, the construction sector did not experience stagnation. The most fundamental factor that will determine the construction sector's performance for the remainder of the year is how the significant increase in housing costs will affect demand in the sector," he said.