Service Sector Rebounds in June Amid Deepening Real Estate Slump

One of Turkey's economic lifelines, service production, regained lost momentum in June 2026, signaling a recovery on both monthly and annual bases; however, the sector's picture reveals a sharp divergence, with a deepening contraction in real estate services casting a shadow over the general uptick and highlighting ongoing market caution and cost pressures.

Divergent Trends in Service Production

According to data from the Turkish Statistical Institute (TÜİK), the service production index, a leading indicator of economic activity, moved into positive territory in June following the previous month's decline. The data indicates that information technologies and transportation are the primary drivers of the general recovery, while areas affected by demand contraction continue to suffer significant losses.

■The service production index rose by 0.6% monthly and 1.3% annually in June.

■Information and communication services led the growth with an annual increase of 9.4% and a monthly surge of 8.7%, driven by tech transformation and digitalization investments.

■Transportation and storage services increased annually by 1.3% and monthly by 1.9%, indicating rising commercial volume.

■While accommodation and food services saw an annual rise of 1.5%, a monthly decline of 1.1% suggests persistent seasonal fluctuations.

Red Alert in Real Estate Services

Despite the improvement in the general economic outlook, the real estate sector stands out as the area experiencing the sharpest decline in service production data. The impact of interest rates and cost pressures on the sector is clearly visible in the figures.

■Real estate services suffered a shocking annual contraction of 8.8%, confirming the severe stagnation in the sector.

■On a monthly basis, real estate services also fell by 1.9%, continuing their negative divergence.

■Monthly declines in professional, scientific, and technical services, as well as administrative and support services (2.7% and 3.5% respectively), point to continued spending restrictions in the business world.

As a Real Estate Development Investment and Valuation Specialist, the most striking detail in this data is the sharp annual drop of 8.8% in real estate services. Contrary to the general increase in the service production index, this contraction in the real estate sector is a direct reflection of the slowdown in construction activities, the erosion of purchasing power, and constraints caused by credit costs. Particularly amidst discussions of 'real losses in housing' and 'slowing sales,' this data is the most concrete proof that the sector is under recession pressure, necessitating a 'wait and see' strategy for investors in the short term.