Turkey’s Economic Confidence Index Rises in November

Turkey’s economic mood strengthened in November as the country’s overall economic confidence index climbed 1.3%, reaching 99.5, according to newly published data from the Turkish Statistical Institute (TurkStat). The index, which stood at 98.2 in October, moved closer to the critical 100-point threshold—the level that separates pessimism from optimism in market sentiment. The latest reading reflects broad-based improvements across consumer, industrial, service, retail, and construction sectors, suggesting that economic expectations may be stabilizing after several months of mixed performance.

The economic confidence index is a composite indicator that blends multiple sector-based confidence measurements into a single score. By aggregating trends in consumption, production, employment expectation,s and overall business perceptions, the index offers a snapshot of the country’s short-term economic outlook.

Consumer Sentiment Strengthens

One of the most notable improvements in November came from households. The consumer confidence index rose 1.6%, increasing from its previous level to 85. Although consumer sentiment remains below the neutral benchmark of 100—indicating persistent caution among households—the latest gain signals a modest recovery in expectations for personal finances and the broader economic situation. Improvements in retail activity, wage adjustments, and easing price pressures in select categories may have contributed to this uptick.

Consumer confidence plays a crucial role in shaping economic momentum. Rising optimism among households typically translates into stronger spending, which in turn supports production, services, and employment. November’s increase, therefore, represents a positive signal for domestic demand heading into the final month of the year.

Industrial Confidence Expands with Real Sector Optimism

The real sector confidence index, which reflects sentiment among manufacturers and industrial producers, rose 1.2% month over month to 103.2. Because this index remains above 100, it indicates that businesses in the industrial sector continue to maintain an optimistic outlook. Recent trends in export orders, production expectations, and inventory management appear to be supporting this positive momentum.

Industrial confidence is a key driver of economic growth, as manufacturers typically respond to positive sentiment by increasing capacity utilization, hiring and investment. The November improvement, therefore, suggests that expectations for future production may be firming.

Service Sector Maintains Strong Confidence

The services sector, one of the most significant contributors to Turkey’s employment and economic activity, also registered progress. The sector’s confidence index rose 1% to 111.8, reinforcing its sustained strength throughout the year. Tourism activity, hospitality demand, transportation services, and professional business services all contribute to this index. Levels above 100 signal that service providers expect continued expansion in business volume and profitability.

Retail Sector Confidence Edges Higher

Retail activity continued to strengthen, with the retail trade confidence index rising 0.9% to 114.2. Retailers reported improved expectations for sales volume, stock levels, and customer demand in the upcoming period. This trend is significant as it reflects both supply-side confidence and consumer-facing activity.

The retail sector’s strong performance aligns with signals from consumer confidence and manufacturing sentiment, indicating a more synchronized improvement across the economic landscape.

Construction Sector Confidence Rebounds

The construction sector confidence index climbed 1.5%, rising to 84.9. Despite remaining below the neutral level, the increase suggests improving expectations among builders regarding order books and employment prospects. The sector has been navigating challenges related to input costs, financing conditions, and seasonal factors. Still, the November rise may signal that business activity could stabilize heading into the new year.

Construction holds strategic importance for employment and investment cycles, making any upward move in confidence relevant for broader economic dynamics.