Economic optimism declines, utilization rate decreases in June
Vibe Check: Ankara, Turkey's Manufacturing and Business Sentiment in June
Let's dive into the current state of play in Ankara's manufacturing and business sentiment, as observed in June. Spoiler alert: it's a bit of a rollercoaster ride!
The Central Bank had some interesting figures to share on June 23. The unadjusted headline manufacturing sector capacity utilization rate (CUR) dipped from 75% in May to 74.6%. This decline was particularly notable in durable consumer goods, where utilization plummeted from 72.3% to 69.5%.
On the bright side, non-durable consumer goods and intermediate goods posted marginal gains, rising to 73.5% and 75.1%, respectively. And y'all thought the perks of living small were overrated!
Confidence among Turkish businesses, on the other hand, took a hit in June, with the Real Sector Confidence Index (RSCI) plummeting to its lowest level in ten months. The index slipped to 98.4, while the unadjusted index dropped by 1.1 points to 100.3. Hey, at least the food sector using 74% of its capacity is something to keep the pantries full!
The month of June saw some ups and downs in the sub-indices too. The real sector's assessment of the general business situation retreated from 87.8 in May to 85.4, while the sub-index of total orders in the past three months fell from 96.3 to 94.
Meanwhile, the sub-index of export orders in the next three months climbed from 104.9 to 105.1. So, let's keep our fingers crossed for a boost in exports, shall we?
As for the Turkish Statistical Institute (TÜİK), it reported confidence data in the key services, retail, and construction sectors in June. The monthly increase in the confidence index in the services sector slowed from 0.9% in May to 0.4%, settling at 110.9 points. Retail confidence, which rose 0.6% monthly, dropped 2.5% in June compared to May, as expectations for business volume in the next three months dipped.
Finally, confidence among businesses in the construction sector declined 1.7% month-on-month in June after surging 3.9% month-on-month in May. So, while some sectors hold on to hope, others remain a little more, let's say, guarded.
In conclusion, Ankara's manufacturing sector is currently experiencing a slight moderation with subdued business sentiment, while its services, retail, and finance sectors show more resilience. Turkey's economic challenges, including high inflation and currency depreciation, contribute to this mix of uncertainty and cautious optimism across sectors.
Sources:
- Unadjusted headline manufacturing sector capacity utilization rate (CUR) from the Central Bank
- Real Sector Confidence Index (RSCI) and sub-indices from the Central Bank
- Confidence data in the services, retail, and construction sectors from the Turkish Statistical Institute (TÜİK)
- Overall analysis from various sources.
The finance sector, as observed in June, experienced some resilience amid Turkey's economic challenges, while the Real Sector Confidence Index (RSCI) in business confidence took a hit, reaching its lowest level in ten months.
In conclusion, although Ankara's manufacturing sector is experiencing a slight moderation with subdued business sentiment, the services, retail, and finance sectors exhibit more resilience in the face of Turkey's economic challenges, including high inflation and currency depreciation.
