Latest Turkish real sector data
The lira is below 1.70 again, thanks to PM Erdogan’s assurances today (according to the press), so it is time to talk about Monday’s July real sector confidence and capacity utilization figures, which come from the same survey:
Pretty good figures, precisely because they are not that good:) While July capacity utilization rate, or CUR, rose to 75.4 percent from 74.4 percent last year, it fell from 74.7 to 73.2 percent last month on a seasonally-adjusted basis. Seasonally-adjusted CUR, which was introduced last month, is continuing its decline from the end of last year.
As for real sector confidence, another fall, from 114.6 to 114.1 last month, but still quite high- well above pre-Lehman levels as well as the 100 threshold that separates a contraction and expansion. As for the sub-indices, orders, employment and investment were all higher, while export orders dropped sharply, reflecting Euro Area woes (Turkey’s largest export market). Sentiment fell quite a bit as well. You can see a bifurcation (why did I choose this weird word) between strong domestic demand and weaker external demand in these figures.
All in all, these early indicators DO NOT show a significant pick-in economic activity in the third quarter, as some, including your friendly neighborhood economist, were fearing. It seems Europe has come to the rescue!:)
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