Turkish Business Confidence Index Falls to 102.8 During Economic Uncertainty

Turkish Central Bank Reports a 2.6-Point Decline in Real Sector Confidence Index for June

The Real Sector Confidence Index (RKGE) in Turkiye decreased by 2.6 points to 102.8 in June, according to the latest Economic Tendency Statistics and Real Sector Confidence Index data released by the Central Bank of Turkiye. This decline reflects a growing sense of caution among manufacturers.

The Economic Tendency Survey, which formed the basis of these results, included responses from 1,738 manufacturing businesses. The data, adjusted for seasonal variations, also showed a decrease of 1.9 points in the seasonally adjusted Real Sector Confidence Index, bringing it to 100.5.

Detailed analysis of the survey responses indicates a mixed outlook: while assessments of current finished goods inventory positively impacted the index, other factors such as total orders, fixed capital investment expenditure, employment expectations for the next three months, general business conditions, recent total orders, production volume, and export orders for the next three months had a negative effect.

Positive trends were observed in production volume and export orders over the past three months compared to the previous month, while domestic order volumes showed a decline. Additionally, there was a strengthened perception that total current orders were below seasonal norms, whereas the view that finished goods inventory levels were above seasonal norms weakened.

Looking ahead, the outlook for production volume, export orders, and domestic orders over the next three months has dimmed, along with expectations for fixed capital investment over the next 12 months and employment in the next quarter. Furthermore, the expectation for the Producer Price Index (PPI) for the next 12 months decreased by 1.0 point to 53.6%.

There was also a decline in the number of businesses anticipating increased average unit costs and sales prices over the next three months, indicating a cautious economic environment. Overall, the sentiment within the industrial sector has grown more pessimistic compared to the previous month.

Source: Trthaber / Prepared by Irem Yildiz

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