Turkey: Capacity Utilisation

Turkey: Capacity Utilisation

Correction of the December Data Resulted in a m/m Decline in the CUR

On a seasonally adjusted basis, capacity utilisation rate (CUR) decreased 0.5pp m/m to 73.1% in January. Unadjusted CUR decreased 1.2pp m/m to 72.4%. On our calculations, both consumer goods and durable goods production increased by 0.7 pp m/m on a s.a. basis. On the other hand intermediate and investment goods production declined by -1.4 pp m/m and -0.8 pp m/m, respectively, partly counterbalancing the sharp rise they displayed last month. Among the export market oriented sectors, CUR in motor vehicles declined 1.0 pp m/m, while basic metals production dropped 1.7pp m/m. However CUR in textile sector remained strong and increased 1.3pp m/m.

At 102.1 January’s real sector confidence index returned back above 100-threshold that separates positive from negative sentiment. Index remained above 100 during 2012 before dropping to 97.9 in December. The increase was mostly driven by the strengthening in the volume of output and export orders for the next 3 months. All the other components of the confidence index posted a m/m increase except stocks of finished goods (-0.2pp decline) and total amount of orders associated with the current situation (-4.2pp decline).

January data shows that economic activity continues to be strong in the beginning of the year and consumer confidence is picking up. In light of the January’s MPC meeting, CBRT’s decision will, on balance, lead to a further easing of financial and monetary conditions, in our view. Consequently, we expect economic activity and business sentiment to strengthen in the coming months.