* Firms closed ‘08 with contracts worth $24.6 bln abroad * See ‘09 deals in the Middle East, North African countries
* Expect renewed interest in the domestic property market
By Selcuk Gokoluk
ANKARA, Jan 7 (Reuters) - Turkish construction firms expect to seal contracts worth $25 billion this year, nearly the same amount as last year, Erdal Eren, chairman of the Turkish Contractors’ Association, said on Wednesday.
The Turkish construction industry shrank 4.3 percent in the third quarter of 2008 due to the global financial crisis, however Eren expects business from abroad to mitigate any future impact.
“We need to be realistic,” Eren told Reuters. “It is possible that our business volume abroad will be around $25 billion in 2009, but I hope that our annual business volume will rise to $40 billion in 2010 and onwards.”
Eren said Turkish firms had to look for business opportunities abroad, while hundreds of thousands of new homes built in Turkey’s big cities during recent boom years wait to be sold.
Aggressive business strategies and cost-efficient offers have boosted Turkish firms’ shares in markets like Russia, Libya, Algeria and the Gulf countries, he said.
Turkish firms won $24.6 billion worth of projects abroad last year up from $1.2 billion in 2002.
Eren said many countries in the Middle East and North Africa where Turkish construction firms work are closed economies with relatively limited exposure to the global credit crisis.
“We have gained a dominant position in the African and Middle Eastern countries in recent years and there are serious business opportunities over there,” Eren said.
Turkish firms expect to take a share in public infrastructure projects worth $500 billion in India and $160 billion in Libya in the coming years, he said.
The domestic construction sector will remain weak unless the government stimulates the market through public infrastructure investments.
“I do not expect to see a recovery in the construction sector through the private sector in 2009. We are trying to tell the prime minister and the government that the sector needs to be stimulated through public investments,” he said.
However, Eren said traditional instruments such as government bonds are becoming less attractive for investors and this might renew investor interest in the property market. Turkey’s benchmark bond yield fell to a 2-1/2 year low this week.
Lower central bank rates may make borrowing from banks more affordable for potential buyers, he said.
Editing by Sharon Lindores