Business sentiment in all three sectors, namely construction, retail and service, deteriorated further in September after the confidence in all three industries declined in August, the statistics office TUIK announced also on September 22 the results of its monthly confidence survey. The central bank will release on September 28 the results of real sector confidence survey for September.
The political uncertainty and escalating violence continue to weigh on business sentiment. Latest surveys by the polling agencies regarding snap elections on November 1 have been pointing mixed results as always. Some surveys from the government side show that the Justice and Development Party (AKP) has risen its votes to recover its one-party government, however, there is no other survey suggesting a solution to the current hung parliament. The other factor that has been affecting business sentiment is the weaker currency.
The seasonally-adjusted service sector confidence index declined 2.3% m/m in September, after declining 0.6% m/m in August, according to the TUIK data. The seasonally-adjusted retail industry confidence index that decreased 2.6% m/m in August also deteriorated by 4.6% m/m in September. The seasonally-adjusted construction industry confidence index declined 2.1% m/m in the month, after declining a 0.5% m/m in August.
Services sector, which accounts to 58.4% of the economy in real terms, grew 4.1% in Q2, thanks to the significant growth rates achieved by financial services and insurance (9.1% growth in Q2, 12.6% share in overall GDP), wholesale and retail trade (2.6% growth in Q2, 13% share in overall GDP) and transportation (2.3% growth in Q2, 12.6% share in total) industries, according to the latest GDP data. Industrial production, which accounts to 34.6% of the economy in real terms, also grew 4.1% while manufacturing industry (25.9% share in overall GDP) grew 5% and construction output (5.9% share in total) grew 2% in the quarter.
Consumer confidence declined by 6.1% m/m to 58.5 in September, its lowest in more than six years, a survey carried out jointly by the statistics office TUIK and central bank showed on September 21.
|Seasonally-adjusted sectoral confidence|
|Aug||Sep||m/m, % / Aug||m/m, % / Sep|
|Business Situation (past 3-months)||96.02||93.88||2||-2.2|
|Demand-turnover (past 3-months)||94.56||91.93||1.6||-2.8|
|Deman-turnover (next 3-months)||109.4||107.19||-4.6||-2|
|Retail Trade Confidence||100.97||96.27||-2.6||-4.6|
|Sales (past 3-months)||97.98||88.89||4.9||-9.3|
|Sales (next 3-months)||105.2||95.81||-9.4||-8.9|
|Employment (next 3-months)||100.6||95.87||2.5||-3.7|
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