The study suggests that the Turkish construction sector -- a chief engine of Turkey's economic expansion -- has maintained its momentum despite worries over a current account deficit at home and a gloomy economic forecast abroad. The TurkStat study on the construction sector also reported that the number of square meters produced in 2012's first quarter increased by 19.7 percent over last year, even as it reported that the number of individual buildings under construction has decreased by 10.1 percent in 2012.
The January-March report also indicates that consumers are continuing to buy up new properties, registering 2.8 percent growth in the number of residence permits issued to new properties over the 2011 quarter and 2 percent growth in the amount of square feet purchased by Turkish consumers.
The data offered a sigh of relief to policy makers who have feared a hard landing for rapidly slowing economic growth in Turkey amidst a global slowdown. With the data, it looks as though a soft landing of gradually slowing growth may be more likely, with continued expansion in the construction sector seen as key to propelling Turkey's economic growth as it has over the past decade. In the years between 2002 and 2011, Turkey's gross domestic product (GDP) grew by an average annual rate of 5.4 percent. It owed some 55 percent of this growth to domestic consumption and another 45 percent to private investment, whereas public investment accounted for only 5 percent. That also explains why the incumbent government, which has been in office since late 2002, has managed to bring about a solid budget performance over the past 10 years.