In August 2020 the seasonally and calendar adjusted SAMEKS Composite Index declined by 4.9 points compared with the previous month, falling to a value of 50.6.
While the decline of the services sector index by 8.5 points at once compared with the previous month, to a level of 47.5, was effective in the loss of momentum observed in the index in this period, a decline of 4.6 points was also recorded in the industry sector index despite its continuing course above the reference value of 50.
While the loss of momentum observed in input purchases relating to the services sector was seen to be reflected negatively in business volume, the contraction that occurred in new orders was effective in the loss of pace of the industry sector. As a result of these developments, the seasonally and calendar adjusted SAMEKS Composite Index, which despite declining by 4.9 points compared with the previous month continued its course above the reference value of 50, has continued to give positive signals for the third quarter of the year.
Industry Sector SAMEKS Index
The seasonally and calendar adjusted SAMEKS Industry Sector Index declined by 4.6 points in August 2020 compared with the previous month, falling to a level of 51.0. The new orders sub-index, which recorded a decline of 7.8 points compared with the previous month and fell to 44.3 points, played a decisive role in the loss of momentum experienced across the sector. In connection with this development, the rate of increase observed in input purchases also declined and the sub-index in question fell by 5.0 points to a level of 53.4. Thus the production sub-index, which in July had signalled an increase again after an interval of 5 months, declined by 13.3 points at once in August and, at 44.7 points, once again stood below the reference value of 50. Despite this decrease observed in production, the employment increase that began in the sector in June continued in this period as well, and the sub-index, recording an increase of 3.5 points, rose to 62.7 points. In conclusion, although a loss of momentum of 4.6 points was experienced compared with the previous month, the course of the SAMEKS Industry Index above the reference value of 50 indicates that the recovery in the sector continued in this period as well.
Services Sector SAMEKS Index
The seasonally and calendar adjusted SAMEKS Services Sector Index declined by 8.5 points in August 2020 compared with the previous month, falling to a level of 47.5. It is seen that the loss of pace of 4.6 points observed in input purchases relating to the sector was the main determinant of the contraction observed across the sector. In connection with this development, the business volume sub-index, which declined by 9.8 points at once compared with the previous month to a level of 41.4, fell below the reference value of 50 once again in this period, pointing to stagnation in the sector. The decline of the finished goods stock sub-index by 13.5 points to 48.6 points, and the decline of 7.8 points observed in the suppliers' delivery time sub-index, were the other factors that accelerated the decline experienced in the services sector in August. As a result of these developments, the employment sub-index for the services sector also declined by 7.5 points compared with the previous month to a level of 47.9, presenting a negative outlook for the labour market. Thus the SAMEKS Services Sector Index, which last month rose above the reference value of 50 for the first time since the February 2020 period, once again pointed to contraction in the sector as of the August period.
COMMENTARY:
Although it has lost pace compared with the previous month, the continuation of the SAMEKS Composite Index's course above the threshold value indicates that the recovery in the real sector is continuing. The increases observed in this period in official data such as Manufacturing Industry Capacity Utilization and the Real Sector Confidence Index confirm the positive outlook for the SAMEKS Industry Sector Index. At the same time, it is seen that the losses in value observed in the Turkish lira as a result of the fluctuations observed in the exchange rate throughout August have limited the recovery in the real sector. It is observed in particular that the downward pressure on the Composite Index of the SAMEKS Services Sector Index, which presented a weak appearance again in August after the increase it recorded in July, is continuing. In this context, we may estimate that the moderate increase in SAMEKS will continue in September as well and that, although it has presented a generally stagnant appearance, it will point to a recovery in the real sector in the third quarter compared with the previous quarter.