The June SAMEKS data of the Independent Industrialists and Businessmen Association (MÜSİAD) has been announced

In June 2019, the seasonally and calendar adjusted SAMEKS Composite Index rose by 5.8 points compared with the previous month to reach 46.5.

This increase observed in the index was driven by the services index rising 7.1 points from the previous month to 46.9, while the industry index also rose 6.3 points to 47.7, supporting the acceleration observed in the composite index. While input purchases for the services sector were observed to have moved back above the reference value and to have led the revival in the sector, a recovery in production also took place in the industrial sector as new orders gained pace.

Despite the increase of 5.8 points over the previous month, the fact that the seasonally and calendar adjusted SAMEKS Composite Index remained below the reference value of 50 shows that the slowdown in economic activity continued in June as well. Nevertheless, the visible increases recorded in the sub-indices compared with the previous month indicate that the recovery process in the real sector will continue in the coming period.

Industry Sector SAMEKS Index

The seasonally and calendar adjusted SAMEKS Industry Sector Index rose in June 2019 by 6.3 points compared with the previous month to reach 47.7.

In this period, new orders, whose rate of decline eased, rose by a full 10.0 points from the previous month to 46.3, which was the determining factor in the recovery of the industrial sector.

In parallel with the increase observed in new orders, a significant acceleration was also observed in input purchases for the sector. Purchases, which rose by 6.1 points in this period to 54.5, were influential in the recovery observed in production.

In this period, production for the industrial sector rose by 4.2 points to 41.9. The fact that the new orders sub-index remained below input purchases increased the finished goods stock for this period and thus limited the rate of increase in production.

The recovery observed across the sector as a whole was also reflected positively in employment. The employment sub-index, which recorded an increase of a full 10.1 points from the previous month in this period, moved back above the reference value of 50 after a two-month interval.

Thus, the two-month downward trend in the seasonally and calendar adjusted SAMEKS Industry Index came to an end in June; however, the index, remaining below the reference value of 50, indicated that the stagnant course in the sector has not yet come to an end.

Services Sector SAMEKS Index

The seasonally and calendar adjusted SAMEKS Services Sector Index rose in June 2019 by 7.1 points compared with the previous month to reach 46.9.

In this period, input purchases rose by a full 12.2 points from the previous month to 56.6 and were the main determinant of the recovery in the services sector.

Owing to the rapid increase in input purchases, the business volume of the sector recorded an increase of 8.6 points compared with the previous month, rising to 40.0.

Despite the recovery observed, business volume, which is still running well below the reference value of 50, indicates that the stagnant outlook in the sector continues.

Despite the rapid increase in purchases, the continuation of the sluggish outlook in business volume caused the existing stocks of firms to record an increase in this period, and the finished goods stock sub-index rose by 12.2 points to 49.7.

In line with these developments, the loss of momentum in the employment sub-index for the services sector also eased, and the index, rising 5.8 points from the previous month, reached 45.4.

Thus, the seasonally and calendar adjusted SAMEKS Services Sector Index displayed a visible recovery compared with the previous month; on the other hand, it maintained its course below the reference value of 50 and sustained its negative outlook.

COMMENTARY:

SAMEKS, which left the first quarter of the year behind with an average of 45.1 points, also remained below the reference value of 50 in the second quarter with an average of 43.8 points. Thus, the June outlook of SAMEKS, which confirms that the stagnant picture for Türkiye's economy in its rebalancing process continues, indicates that the chart of the real sector has begun to move upwards as expected. The increases observed in the same period in the Manufacturing Industry Capacity Utilization Rate, the Real Sector Confidence Index and the Consumer Confidence Index data also show that economic activity is gaining momentum. Along with the decrease in the volatility observed in the exchange rate, the positive course of foreign trade performance and the retreat in consumer prices over the past two months, together with the current account balance data that is expected to follow an even more favourable course with the approaching tourism season, the recovery process in Türkiye's economy is expected to accelerate from the second half of the year onwards.