In April 2019, the seasonally and calendar adjusted SAMEKS Composite Index declined by 3.5 points compared with the previous month, falling to 44.4.

In April 2019, the seasonally and calendar adjusted SAMEKS Composite Index declined by 3.5 points compared with the previous month, falling to 44.4. This decline observed in the index was mainly driven by the services index, which fell by 4.2 points from the previous month to 44.5, while the industry index also decreased by 0.1 points to 46.8, having only a limited effect on the fall observed in the composite index.

While the slowdown observed in input purchases was influential in the decline recorded in the services sector, in the fall in the industry sector the decrease in new orders compared with the previous month draws attention.

Thus, the stagnation that began in September 2018 continued in April as well, and the seasonally and calendar adjusted SAMEKS Composite Index presented a negative outlook for the real sector.

Industry Sector SAMEKS Index

In April 2019, the seasonally and calendar adjusted SAMEKS Industry Sector Index declined by 0.1 points compared with the previous month, falling to 46.8. New orders in the industry sector recorded a decrease of 1.4 points compared with the previous month and were the main determinant of the decline in the index.

Despite the fall observed in new orders, an increase of 2.5 points was recorded in input purchases. The fact that input purchases maintained their course above the reference value of 50 indicates that the confidence of firms operating in the industry sector towards the sector persists.

With the continued increase in input purchases despite the fall observed in new orders, production in the sector rose by 2.1 points to 46.5. As a result of these developments, an increase of 3.9 points was also recorded in the finished goods stock sub-index.

In this period, employment in the industry sector fell sharply by 6.9 points to 43.0. The employment sub-index, which has remained below the reference value of 50 for the past 12 months, indicates that job losses in the industry sector continue.

Thus, the recovery trend observed in the previous month in the seasonally and calendar adjusted SAMEKS Industry Index came to an end in the April 2019 period, and the index, standing below the reference value of 50, indicated that the sluggish course in the sector continues.

Services Sector SAMEKS Index

In April 2019, the seasonally and calendar adjusted SAMEKS Services Sector Index declined by 4.2 points compared with the previous month, falling to 44.5. Input purchases in the services sector fell sharply by 4.2 points compared with the previous month, standing at 55.1. Despite this decline, input purchases remained above the reference value of 50 and maintained their positive outlook.

Owing to the loss of pace in input purchases, business volume in the sector recorded a decline of 5.8 points compared with the previous month, falling to 35.7. Thus, business volume in the services sector stood at the lowest level of the year.

The rapid decline in business volume due to the loss of momentum in purchases led firms to draw down their existing stocks in this period, and the finished goods stock sub-index decreased by 2.5 points to 43.4.

In line with these developments, the employment sub-index for the services sector also continued its decline, decreasing by 2.4 points compared with the previous month to 44.8. Thus, the seasonally and calendar adjusted SAMEKS Services Sector Index, following its marked recovery in February and March, lost momentum once again as of April and presented a negative outlook for the sector as a whole.

COMMENTARY:

The seasonally and calendar adjusted SAMEKS Composite Index, whose average for the first quarter of the year remained below the reference value of 50 at 45.2, entered the second quarter of the year at 44.4 points, presenting a negative picture for this period. In the April 2019 period (as of 29 April 2019), the depreciation of the Turkish Lira against the US Dollar by approximately 8 percent was influential on firms’ input purchases, new orders and production processes; thus the stagnation in economic activity continued. While the increase recorded in April in manufacturing industry capacity utilization and in the real sector confidence index according to CBRT data draws attention as a positive development for the real sector in this period, the changes observed in producer costs due to fluctuations in the exchange rate are expected to continue to be influential on the course of SAMEKS in the coming period