Turkish business confidence at lowest level since 2009

By bne IntelliNews January 25, 2017

Turkey’s business confidence index declined to 97.0 points for January, the lowest level recorded since December 2009, central bank data showed on January 25. In December 2016, the index stood at 98.4.

Expectations for the development of the Turkish economy have been deteriorating at an escalating pace since the start of this year. Turkey's economic growth has slowed because of weaker expansion in private investment and a smaller contribution from net exports, the World Bank said last November 22. It added that political events, including the failed coup attempt of July last year and the subsequent purges pursued against government officials and in other areas such as the military and in business, were casting clouds of uncertainty and were expected to affect the pace of economic activity.

Six of the business sentiment survey’s total of nine sub-indices deteriorated in January. The strongest decline was recorded in the sub-index evaluating the general business situation, while the sharpest increase was seen in the sub-index evaluating export orders for the next three months.

Separately, statistics office TUIK announced on January 25 the results of its monthly confidence survey for the construction, retail and service industries. The figures showed business sentiment in all three industries deteriorated in January.

The seasonally-adjusted business sentiment index for Turkey’s construction sector declined by 1.7% m/m in January, following the 0.5% m/m increase seen in December. The retail confidence index declined 0.2% m/m, after posting a 0.1% m/m rise in December. Confidence in the service sector declined by a sharp 6.2% m/m in January, after deteriorating by 3.5% m/m a month ago.

Data from the central bank, also released on January 25, showed the manufacturing sector capacity rate fell to 75.5% in January, the lowest level registered since August 2016. The capacity utilisation rate, however, was higher than the 74.9% level posted in January 2016. The capacity utilisation rate stood at 76.5% in December.

Capacity utilisation in durable goods declined to 69.2% in January from 72.5% in December, while usage in the consumer goods industry declined to 70.6% from 72.6%. In the food sector, the usage rate stood at 70% in January, down from 71.2% in December.

TUIK reported that the capacity utilisation rate in the intermediate goods industry declined to 75.5% in January from 76.7% a month ago, while the usage level in capital goods manufacturing declined to 76.5% from 77.6%.

Real Sector Confidence Index
  Dec-13 Dec-14 Dec-15 Aug-16 Sep Oct Nov Dec Jan-17
Real Sector Confidence Index 102.1 101.2 102.2 103.6 106.5 101.7 103.7 98.4 97.0
Total amount of orders (Current situation) 91.0 87.0 90.2 86.5 87.6 90.1 91.7 90.7 85.3
Amount of stocks of finished goods (Current situation) 94.2 96.4 97.0 90.7 95.9 94.4 99.0 96.1 94.1
Volume of output (Next 3 months) 99.8 106.7 105.7 118.3 122.1 115.0 108.3 100.2 103.9
Total employment (Next 3 months) 104.4 103.4 103.6 111.5 109.4 107.1 106.4 107.6 105.6
Total amount of orders (Past 3 months) 110.3 102.1 105.8 103.6 109.1 98.4 115.8 104.7 99.7
Export orders (Next 3 months) 108.3 111.3 111.7 121.7 123.7 112.6 110.5 105.4 111.1
Fixed investment expenditure 110.4 105.8 107.7 104.0 105.1 103.9 100.8 98.2 103.3
General business situation 98.6 97.1 95.8 92.6 99.2 92.1 97.2 84.2 73.2
Source: tcmb

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