Con­fi­dence in­dices: Good or bad?

Dünya Executive - - COMMENTARY -

One of the most strik­ing eval­u­a­tions of TurkS­tat’s sec­toral con­fi­dence in­dices came from econ­o­mist Zafer Yuk­seler. Let’s leave the floor to him:

“Ac­cord­ing to the sec­toral con­fi­dence in­dices an­nounced by TurkS­tat, con­fi­dence in ser­vices and the re­tail sec­tor in­creased slightly in Septem­ber, while the con­struc­tion sec­tor con­fi­dence in­dex in­creased by 8.3 per­cent. All sub-com­po­nents of the con­struc­tion sec­tor con­fi­dence in­dex in­creased.

Sales prices ex­pec­ta­tions in­creased by 8.2 per­cent in Au­gust and 2.5 per­cent in Septem­ber, a 10.9 per­cent in­crease in the last two months.

The cur­rent level of for­mal or­ders re­ceived in Septem­ber in­creased by 6.6 per­cent (14.7 per­cent in the last two months) and the ex­pec­ta­tion for to­tal num­ber of em­ploy­ees in the next three months in­creased by 9.4 per­cent (15 per­cent in the last two months).

Fol­low­ing the Cen­tral Bank’s in­ter­est rate cuts, loan rates de­creased. The most sig­nif­i­cant de­crease oc­curred in hous­ing loan in­ter­est rates. Hous­ing loan in­ter­est rates, which were 21.06 per­cent in July, de­creased to 14.15 per­cent in Au­gust and 12.93 per­cent in Septem­ber 1 to 13 as a re­sult of cam­paigns ini­ti­ated by pub­lic banks. The fall in hous­ing loan in­ter­est rates in the last two months had a pos­i­tive im­pact on the or­ders and em­ploy­ment ex­pec­ta­tions in the con­struc­tion sec­tor. The in­crease in or­ders re­ceived also in­creases the sales prices ex­pec­ta­tion.

As a re­sult, the ex­pec­ta­tion is that con­struc­tion com­pa­nies will ben­e­fit sig­nif­i­cantly from the de­crease in hous­ing loan in­ter­est rates.”

Is there much to add to this as­sess­ment?

An­other drop in real sec­tor con­fi­dence

When the real sec­tor con­fi­dence in­dex was reached 102.5 in Au­gust, we said that the real sec­tor con­fi­dence is grad­u­ally re­cov­er­ing but also em­pha­sized that the trend is im­por­tant, not monthly move­ments. The Au­gust in­dex was the sec­ond high­est this year. A de­cline was ob­served again in Septem­ber. The in­dex fell to 98.8. There is a de­crease in all items that con­sti­tute the real sec­tor con­fi­dence in­dex. How­ever, the de­crease in one of th­ese items, which in­di­cates the stock of fin­ished goods, does not in­di­cate a neg­a­tive sit­u­a­tion, but rather a pos­i­tive one. The de­cline in two of the in­dex items is re­mark­able: pro­duc­tion vol­ume in the next three months and the or­der quan­tity in the next three months. The neg­a­tive trend in th­ese con­nected items is not a good sign.

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