In September 2019, the seasonally and calendar adjusted SAMEKS Composite Index declined by 1.4 points compared with the previous month, falling to 46.4.

The decline observed in the index was driven by the services index, which fell by 2.2 points from the previous month to 45.8 points, while the industry index also decreased by 2.0 points to 46.6, maintaining its negative outlook.

In this period, the loss of momentum in input purchases for the services sector adversely affected business volume, while a loss of production was observed in the industrial sector due to the decrease in new orders. Thus the SAMEKS Composite Index, which continued to remain below the reference value of 50 in September as well, indicated that the stagnation in the real sector persisted in this period and presented a negative picture for the third quarter of the year.

Industry Sector SAMEKS Index

The seasonally and calendar adjusted SAMEKS Industry Sector Index declined by 2.0 points in September 2019 compared with the previous month, falling to 46.6. The decrease of 0.2 points in new orders from the previous month to 46.8 was the main determinant of the loss of momentum seen in the industrial sector in this period. In line with the decline observed in new orders, input purchases fell by 4.4 points from the previous month to 48.7. Thus, purchases for manufacturing in the industrial sector were observed to decrease once again after an interval of three months. In connection with these developments, the production sub-index fell by 1.5 points from the previous month and, at 46.9 points, remained below the reference value of 50. The suppliers' delivery time sub-index, which fell by 4.0 points from the previous month to 44.6, points to disruptions in the real sector's supply of raw materials and intermediate goods. Employment in the industrial sector, meanwhile, decreased by 3.0 points from the previous month and, falling to 47.0 points, presented a negative outlook. Thus the seasonally and calendar adjusted SAMEKS Industry Index, realized at 46.6, indicates that the stagnant picture regarding the sector continued throughout the third quarter of the year. 

Services Sector SAMEKS Index

The seasonally and calendar adjusted SAMEKS Services Sector Index declined by 2.2 points in September 2019 compared with the previous month, falling to 45.8. Although they continued to remain above the reference value of 50, input purchases, which fell by 4.2 points from the previous month to 50.4, were the determinant of the decline in the services sector. Accordingly, business volume in the sector maintained its stagnant appearance in this period as well, decreasing by 1.0 point from the previous month to 45.3. In this period, the fall of the finished goods stock for the services sector by 7.2 points at once from the previous month to 40.2 shows that companies preferred to consume their existing stocks in response to declining business volumes. In parallel with the negative outlook across the sector, the employment sub-index also fell by 3.5 points from the previous month, standing at 45.2. In the light of these developments, the seasonally and calendar adjusted SAMEKS Services Sector Index continued to remain below the reference value of 50 in the September period as well.

COMMENTARY:

SAMEKS's outlook for the September 2019 period has continued to present a negative picture for the real sector as a whole. In this period, the declines observed in the manufacturing industry capacity utilization rate and the real sector confidence index data announced by the Central Bank of the Republic of Türkiye confirmed the fall in SAMEKS, while a decline was also recorded in the sectoral confidence index announced by TÜİK. On the other hand, despite having remained below the reference value of 50 throughout the period, the third-quarter average of the SAMEKS Composite Index stood at 46.3 and signalled a recovery compared with the previous quarter. In this context, with the continuation of the declines in interest rates in particular, economic activity is expected to revive and the outlook for the real sector to turn positive along with the final quarter of the year.