Confidence among Turkish manufacturers weakened in October as orders softened, even though factories ran slightly closer to full capacity, according to central bank data released on Oct. 21.
The Central Bank of the Republic of Türkiye (TCMB) said its unadjusted real sector confidence index fell 2.2 points from September to 99.8, dipping below the 100 mark that separates optimism from pessimism. The seasonally adjusted index fell 1.4 points to 101.1. The survey of 1,965 manufacturing workplaces was conducted between Oct. 1 and 14.
Orders weaken, export hopes improve
The general business outlook, production expectations for the next three months and both recent and current total orders pulled the index down. Domestic orders over the past three months moved from a net increase to a net decrease. On the positive side, firms reported stronger expectations for export orders and employment over the next three months and for fixed investment spending over the next year.
Manufacturers’ expected annual producer price inflation for the next 12 months fell 0.6 points to 30.4%. Reports of higher unit costs were unchanged, expectations of rising costs strengthened slightly, and expectations of higher selling prices weakened, a mix the central bank will weigh as it continues its disinflation drive. Market participants polled by the bank this month expect consumer inflation of 29.63% by year-end.
Asked what limited production, 55.6% of firms said nothing did. Insufficient demand was the most common constraint at 12.8%, followed by financial difficulties at 9.1%, shortages of raw materials and equipment at 9.0% and labour shortages at 8.5%.
Capacity use rises
The capacity utilisation rate, which measures how much of their potential output factories are using, rose 0.3 points to 74.5% in October. The seasonally adjusted rate rose 0.2 points to 74.3%, compared with 74.0% a year earlier.
Consumer goods producers recorded the biggest gain, with utilisation rising from 71.4% to 72.3%, led by durable goods such as appliances, which climbed from 66.4% to 68.5%. Investment goods edged up to 73.4%, while intermediate goods were the only group to fall, slipping to 74.4%.
Tobacco (84.7%), wood products (84.5%) and paper (82.8%) were the busiest sectors. Leather (59.3%), machinery and equipment (64.7%) and textiles (69.4%) were among the least utilised.
The data come as other indicators show a mixed picture: construction output rose 2.3% in August, though building work slipped. For how prices are affecting households, see our cost of living in Turkey guide.
Sources
- Reel kesim güven endeksi ekimde geriledi (Bigpara)
- Sanayide kapasite kullanımı ekimde yükseldi (Bigpara)
Photo: Visual08 / Public domain, via Wikimedia Commons
