Turkey’s economy continued to regain pace this month from the coronavirus fallout as data released Tuesday showed manufacturers growing more optimistic amid rising potential output.
“We will bring sustainability to this recovery,” Industry and Technology Minister Mustafa Varank said, citing the Central Bank of the Republic of Turkey (CBRT) data showing that Real Sector Confidence Index (RSCI) rose by 5.5 points to 106.2 points in August compared with 100.7 points in July.
A score above 100 shows an optimistic outlook on economic activity from manufacturers, while a score below 100 signals pessimistic predictions for future developments.
“Real sector confidence increased in future orders, investment expenditures and employment. Manufacturing capacity utilization rates also increased in consumption, intermediate and investment goods,” Varank said.
Also commenting on the data, Treasury and Finance Minister Berat Albayrak said on Twitter: “We take our strength from millions of people who work, produce, support and believe in this country.
According to CBRT data, the seasonally adjusted real sector confidence index (RSCI-SA) also rose by 5.8 points to 105.2 in August, which was 99.4 points the previous month.
The rise in confidence for production, employment, domestic and export order book recorded in August is expected to continue its positive performance for the next three months, the data showed.
The recovery in August came amid the gradual return to the pre-pandemic normal, with momentum in the industry rising due to economic management and support offered to the business sector.
The country’s tourism and service sectors also saw a significant rise in consumption after the country eased restrictions as of May and further relaxed them at the beginning of June after a sharp slowdown in the number of new cases and fatalities due to COVID-19.
Manufacturing capacity increases
The CBRT also released data for Turkey's manufacturing industry capacity Tuesday, showing that the capacity usage increased to 73.3% in August.
The capacity utilization rate (CUR) of the sector rose 2.6 points on a monthly basis, the bank survey showed.
The figures are based on the responses given to its business tendency survey by local units operating in the manufacturing industry, according to the bank. Some 1,761 companies responded to the survey this month.
Among the six main industrial groups, the highest capacity usage came to 75.2% for durable consumer goods, while non-durable consumer goods posted the lowest rate at 68.94%.
In August, among more than 20 sectors, the highest CUR was posted by manufacturers of wood and wood and cork products (except furniture) at 83.8%, while the lowest capacity usage was seen in manufacturers of leather products at 58.1%.
In terms of their production-related groupings, the highest CUR was recorded for intermediate goods with a 75.1% utilization rate, while investment goods posted 70.7% and consumer goods posted a 69.9% utilization rate.
Rise in confidence for services and retail sectors
Meanwhile, Turkey's services and retail trade sectors posted a rise in confidence in August, while the construction sector saw a drop, according to data released by the Turkish Statistical Institute (TurkStat) Tuesday.
Seasonally adjusted confidence indices for services and retail trade was up by 5.7% and 0.2%, respectively, and dropped by 2.3% for the construction sector, month-on-month in August.
The index for services rose 70.5 in August, up from 66.7 in July, data showed.
"In the services sector compared to the previous month, the business situation over the past three months sub-index increased by 15.9% to 63.2," it noted.
The retail trade confidence index, which rose to 94.9 in August, was 94.6 last month, while the construction confidence index stood at 85, decreasing from 87.
The business activity-sales expectation for the past three-month period rose by 14.5% to 79.7, while "current overall order books sub-index became 70 by decreasing 5.2%."
"Among the main factors limiting activities in the construction sector, financial constraints which were 38.2% in July realized as 40.1% in August, insufficient demand which was 31.9% in July realized as 31.5% in August and other factors which were 19.9% in July realized as 20.3% in August," it added.
Sectoral confidence indices calculated from the monthly survey results are evaluated within the range of 0-200. These indices indicate an optimistic outlook when the value is above 100, a pessimistic outlook when it is below 100.
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