Real Sector Confidence Index Slightly Declines in June

In June 2025, Türkiye’s seasonally adjusted Real Sector Confidence Index (RKGE-MA) edged down by 0.2 points, settling at 98.4, according to data released by the Central Bank of the Republic of Türkiye (TCMB).

The survey-based index, which reflects business sentiment across the industrial sector, showed mixed signals. Positive contributions came from expectations regarding export orders, future production volume, fixed capital investments, and current inventory levels. However, confidence was undermined by negative sentiment around overall business outlook, past order volumes, and employment expectations for the upcoming three months.

The unadjusted RKGE, which does not strip out seasonal variations, also dipped—falling 1.1 points from the previous month to 100.3.

Mixed Sentiment in Production and Demand

TCMB’s statement noted that reports of an increase in production volume over the past three months became more prominent. However, export demand expectations weakened compared to the previous month. In a positive turn, assessments of domestic orders shifted from pessimistic to optimistic.

Views on current order volumes remained unchanged, with most firms still considering them below seasonal norms. Meanwhile, assessments of finished goods inventories being above normal declined, suggesting slight inventory improvements.

Outlook on Production, Employment, and Investment

Expectations for future production, export, and domestic orders all slightly weakened in June. Employment projections for the next three months also lost strength. However, the outlook for fixed capital investment spending over the next year gained momentum, reflecting long-term business optimism.

Pricing and Inflation Expectations Ease

Firms reporting an increase in average unit costs over the past three months and those expecting further increases in the coming period have declined. Expectations for sales price hikes in the next three months also eased.

The year-end Producer Price Index (PPI) inflation forecast dropped by 1.2 points, coming in at 37.2%, signaling softer inflation expectations from industrial players.